THE  E^OIEIC 


SUGGESTIONS  . 

SUBMITTED  TO  THE 

! 

I Hon.  Charles  Devens, 

Attorney-General  of  the  United  States, 

ON  THE 

RESOLUTIONS  OF  THE  SENATE  AND  HOUSE  OF  REPRESENTATIVES  ' 
IN  RESPECT  TO  THE  OPERATION  OF  THE  UNION 
PACIFIC  RAILROAD  AND  BRANCHES. 


01  BEHALF  OF  SAID  KAILROAD  COMPANY. 


By  A.  J.  POPPLETON, 

Oen'l  Att’y,  U.  P.  R.R.  Co. 


WASHINGTON,  D.  C. 

Gibson  Brothers,  Printers. 

1877. 


1 


THE]  T’^GIT’ZO 


SUGGESTIONS 


SUBMTTED  TO  THE 

Hon.  Charles  Devens, 

Attoriieij-^Teneral  of  the  I nited  States^ 

ON  THE 


llESOLUTIONS  OF  THE  SENATE  AND  HOUSE  OF  IIEPIIESENTATIVES 
IN  KESPECT  TO  THE  OPERATION  OF  THE  UNION 
PACIFIC  RAILROAD  AND  BRANCHES. 


ON  BEHALF  OF  SAID  lUlLBOAD  COMPANY. 


JIv  A.  J.  POPPUETON, 

GerCl  AtVy,  U.  P.  R.R.  Co. 


WASHINGTON,  D.  C. 

Gibson  Brothers,  Printers, 

1877. 


THE 


PACIFIC 


RAILROADS. 


ORIGIN  AND  PURPOSE  OF  THE  RESOLUTIONS. 


The  resolutions  under  consideration,  tliongli  adopted  by 
botli  Houses  of  Congress,  are  identical  in  substance,  and  un- 
questionably received  their  inspiration  from  the  same  source. 
Though,  in  form,  a simple  resolve  that  the  “ President  be  re- 
quested to  inform  the  respective  bodies  what  legal  imj)ediments, 
if  any,  exist  which  prevent  him  from  executing  said  laws  in 
accordance  with  the  obligations  accepted  and  agreements  made 
b}^  said  Union  Pacific  Railroad  Company  and  bi-ancJies,”  they 
are,  in  truth,  under  the  guise  of  solicitude  for  the  public  inter- 
est, an  assault  by  one  corporate  body  upon  another,  and  they 
originate  in  a private  grievance.  Thus  their  introduction  into 
the  Senate  was  made  the  occasion  of  an  elaborate  arraignment 
of  the  Union  Pacific  Company,  upon  assumed  violations  of  the 
law,  without  proof  of  such  delinquency,  without  anj^  exposition 
of  the  provisions  alleged  to  have  been  disregarded;  but,  on  the 
^ contraiy,  with  a studied  perversion  of  facts  and  law — conclusive 
of  the  animus  and  purpose  from  which  they  spring.  It  is  well, 
- therefore,  to  proceed  somewhat  cautiously,  lest  it  may  turn  out 
an  inquiry  whnt  impediments,  if  any,  exist  to  the  accomplisli- 
I ^ ment  of  some  pecuniary,  private  end  by  the  corporation  insti- 
^^ating  and  pressing  this  controversy. 

2 I propose,  therefore,  to  inquire : 
qO  1-  What  specific  acts  of  the  Union  Pacific  Company  are  al- 
jf^eged  as  breaches  of  the  acts  of  Congress  creating  and  regulating 
^ that  corporation  ? 

2.  Which,  if  any,  of  them  are  true  iii  fact ; and,  if  true,  are 
they  a violation  of  said  acts  of  Congress  ? 

3.  To  what  extent  is  the  Kansas  Pacific  Railroad  Com- 
pany entitled  to  tlie  benefit  of  the  provisions  of  the  acts  of 
Congress  invoked  on  its  behalf  against  the  Union  Pacific;  Com- 
pany ? 


4 


4.  What  impediments  exist  to  tlie  judicial  establisliment  of 
its  alleged  legal  riglits  ? 

5.  What  is  the  interest  of  the  piil)lic  and  the  Government  in 
res])ect  to  tliis  controversy  ? 

ACTS  OF  ALLEGED  VIOLATION  OF  CHARTE:R. 

As  tlie  resolutions  are  silent  in  respect  to  the  specific  acts 
constituting  a violation  of  the  acts  of  Congress,  we  must  look 
elsewliere  for  a statement  of  tliem.  Two  sources  are  available 
for  this  purpose,  originating — tlie  one  in  the  circuit  court  of  tlie 
United  States  for  tlie  district  of  JS^ebraska ; the  other  in  the 
Senate,  both  finding  their  confluence  in  this  hearing,  the  advo- 
cacy of  the  public  wrong  being  now  transferred  from  the  ])ublic 
servaTit  and  devolved  upon  the  advocates  of  a private  interest 
and  client.  As  the  specifications  of  offences  against  the  statute 
contained  in  the  speech  in  support  of  the  Senate  resolution  are 
singularly  vague  and  uncertain,  it  will  be  safer  to  resort 
mainly  to  the  more  exact  statement  contained  in  the  bill  of 
complaint  of  the  Kansas  Pacific  Railroad  Compaii}^  in  its  suit 
to  comp'el  the  Union  Pacific  Company  to  obey  and  observe  its 
alleged  rights,  lately,  by  consent  and  agreement  of  parties, 
submitted  upon  full  argument  to  the  court,  and  now  by  it  held 
under  advisement  for  speed}^  decision.  Lest,  however,  it  might 
give  rise  to  misapprehension  not  to  make  some  reference  to  the 
alleged  breaches  of  the  law  enumerated  in  the  arraignment  of 
the  Union  Pacific  Company  accompanying  the  senatorial  reso- 
lution, a brief  reference  will  be  made  to  them.  They  are  con- 
tained in  a single  page,  of  the  sixteen-page  exposition  of  them, 
now  under  consideration,  and  commence  as  follows  : 

ALLEGED  DISCRIMINATIONS. 

The  young  and  vigorous  State  which  I have  the  honor  in 
part  to  represent  in  this  chamber  is  practically  embargoed 
“ by  the  refusal  of  these  roads  to  compl}^  with  the  law.  No 
“ article  of  commerce  raised  or  manufactured  can  be  transported 
‘‘  west  of  Cheyenne  without  paying  more  for  freiglit,  even  for 
fifty-seven  miles,  than  is  charged  from  Omaha  to  Ogden,  a 
“ distance  of  1,032  miles,  1 select  a few  examples  of  discrimi- 


5 


“ nation  from  late  tariff*  rates  hy  tlie  car-load  of  ten  tons:  On 
bacon  the  charges  from  Cliejmnne  to  Ogden  exceed  those  from 
“ Omaha  to  Ogden  $45  ; for  beans,  $85  ; for  mess-l^eef,  $81  ; 
“ coal  oil,  $81  ; grain,  $88;  liides,  $213.50  ; lard,  $71.50;  lum- 
“ her,  $70;  powder,  $108;  sugar,  $81.  Excess  of  charges  in  a 
“ single  train  of  fourteen  cars  for  516  miles  over  1,032  miles  is 
“ $1,054.40.  Neither  Kansas,  Colorado,  nor  Missouri  can  ship 
“ bacon,  mess-beef,  grain,  live  stock,  &(*,.,  via  Cheyenne,  to  any 
of  the  AA^estern  States  or  Territories,  and  all  are  entirely  shut 
‘‘  out  from  the  markets  of  Utah,  Montana,  Nevada,  and  other 
regions.  Like  discriminations  are  made  by  tiie  Union  Pacific 
Company  in  freight  traffic  by  the  hundred  weight.” 

The  statements  contained  in  the  foregoing  paragraph  are 
erroneous — not  true  in  fact.  No  freight  or  passengers  of  any 
kind  or  class,  whether  received  from  the  Kansas  Pacific,  or 
otherwise,  at  Cheyenne,  is  charged  more  for  carriage  from 
Cheyenne  to  Ogden  than  is  charged  on  like  freight  and  pas- 
sengers from  Omaha  to  Ogden.  It  is  not  done  in  fact,  nor 
do  the  tariffs  and  orders  of  thePTnion  Pacific  Company  permit  it. 
The  statement  of  excess  of  charges  is  wholly  unfounded  in  fact, 
as  witness  the  order  annexed,  marked  Exhibit  ‘‘A.”  If  the 
State  of  Kansas  and  the  Territory  of  Colorado  cannot  ship 
via  Cheyenne  to  any  of  the  AVestern  States  or  Territories,  it  is 
due  not  to  the  rates  imposed  upon  freight  and  passengers 
between  Cheyenne  and  Ogden  l^y  the  Union  Paca’fic.,  but  the 
rates  imposed  by  the  Kansas  Pacific  Company  or  Denver 
Pacific  Company,  or  by  both.  A brief  arra}'  of  figures,  taken  from 
published  tariff's,  will  establish  this  fact.  In  connection  with 
this  it  sliould  be  remembered  that  b}^  the  act  of  Congress — the 
act  of  Alarcli  9,  1869 — relied  upon  by  the  Kansas  Pacific  to 
impose  itself  upon  the  Union  Pacific  as  a branch,  tlie  power  of 
the  Denver  Pacific  to  regulate  its  own  tariffs  is  expressly  re- 
served to  that  corporation  by  Congress,  its  tariffs  being,  by 
affirmative  act  of  Congress,  placed  beyond  the  reach  of  either  of 
the  other  companies. 

NO  DISCRIMINATION  AGAINST  COLORADO  AND  KANSAS. 

Nine-tenths  of  the  freight  and  passengers  originating  in 
Colorado,  to  reach  the  Western  States  and  Territories  via 


f; 

Clieyeniic,  must  pass  over  tlie  entire  lengtli  of  tlie  Denver 
Pacific,  wliicli  lias  always  been  practically  managed  by  the 
Kansas  Pacific.  A comparison  of  tariff's  reveals  the  astound- 
ing fact  that  the  rates  of  freight  from  Che_yenne  to  Denver,  a 
distance  of  106  miles,  are  in  all  instances  nearly  equal,  and  in 
some  instances  greater  than  on  the  same  class  from  Cheyenne 
to  Ogden,  a distance  of  516  miles,  nearly  five  times  the 
greater  distance. 

100  Miles  olf)  Miles 

Ben'oer  to  Cheyenne.  Cheyenne  to  Ogden. 


First  class $2  35  per  100  $2  19  jier  100 

Second  class 1 75  “ 1 89  “ 


Third  class 1 35  “ 1 61 

These  figures  show  conclusively  not  only  that  tlie  exorbitant 
tariff  of  the  Denver  Pacific  (whi(di  is  in  no  respect  subject  to 
our  control  or  influence)  is  the  chief  and  effectual  obstacle 
a^’ainst  the  trade  and  commodities  of  Colorado  reaching  the 
Western  States  and  Territories,  lint  that,  so  far  from  discrim- 
inating against  business  brought  by  it  to  us,  we  carry  their 
business  over  the  Union  Pacilic,  from  Cheyenne  to  Ogden,  at 
about  one-fifth  the  rate  per  mile  charged  by  that  company  over 
its  own  road.  This  shows  why  Colorado  products  do  not  go 
westward,  and  why  Utah  potatoes  and  California  fruit  are  com- 
pelled to  pay  such  enormous  tribute  to  reach  Colorado.  Of 
that  tribute,  the  Union  Pacific,  with  516  miles  of  road,  takes 
one-half,  and  the  Denver  Pacific,  with  one-fifth  the  mileage, 
takes  the  other  half. 

If,  then,  the  following  statement  is  true  and  the  figures  therein 
given  correct,  one-half  the  respective  amounts  go  into  the  treas- 
ury of  the  Denver  Pacific,  thus  reducing  the  amount  received 
by  the  Union  Pacific  to  a less  mileage  rate  than  received  by 
the  Central  Pacific  or  Denver  Pacific,  and  affording  a conspicu- 
ous example  of  the  extent  to  which  figures  may  be  manipulated 
to  dei^eive  and  mislead  : 

“ During  the  years  1875-76,  the  crops  in  Colorado  were 
‘‘  nearly  all  destroyed  by  grasshoppers,  and  our  people  had  to 
“ depend  on  California  and  other  States  to  supply  the  defi- 
ciency.  Potatoes  were  purchased  iu  Texas  and  shipped  to 
“ Denver,  a distance  of  over  two  thousand  miles,  cheaper  than 
thc}^  could  be  had  from  Ogden,  in  Utah,  about  one-quarter 


7 


the  distance.  On  cal>bai>:e  1)\"  the  car-load  the  charo-es  from 
“ Sacramento  to  Denver  are  $515,  distributed  as  follows:  Sac- 
“ ramento  to  Ogden,  74:3  miles,  $195.50  ; Ogden  to  Cheyenne, 
‘‘516  miles,  $229.50;  Clie\mnne  to  Denver,  106  miles,  $90. 
“ One  firm  in  Denver  purchased  in  California  last  year  160  car- 
“ loads  of  frnit,  the  freight  rates  being  more  to  Denver  than  to 

Chicago.  In  car-load  lots  tlie  rate  from  San  Francisco  per 
“ 100  pounds  to  Chicago  are  $1.50  ; to  St.  Louis,  $1.50  ; to  New 
“ York,  $1.50;  to  Cincinnati,  $1.60  ; to  Denver,  $1.94:,  or  forty- 
“ four  cents  per  100  pounds  niOre  to  Denver,  being  one  thou 
“ sand  miles  less  distance  tlian  the  nearest  of  the  other  points 
“ named.” 

While  tlie  disparity  in  tlie  carriage  of  passengers  is  less,  it  is 
also  true  that  tlie  Union  Pacific  has  heretofore  carried  and  still 
transports  passengers,  originating  in  Colorado  and  reaching  its 
road  at  Che3mnne,  both  east  and  west,  at  a less  mileage  rate 
than  charged  on  tlie  Denver  Pacific. 

The  assertion  that  freight  on  car-load  lots  of  fruit  per  hundred 
pounds  from  San  Francisco  to  Chicago,  New  York,  Cincinnati, 
and  St.  Louis,  is  less  than  from  San  Francisco  to  Denver,  if 
true,  is  due  to  the  fact  that  the  rate  from  Cheyenne  to  Denver, 
106  miles — over  the  Denver  Pacific — is  more  than  from  Omaha 
to  Chicago,  New  York,  Cincinnati,  or  St.  Louis  ; that  is  to  say, 
it  is  due  to  the  outrageous  discrimination  of  the  Denver  Pacific — 
which  has  absolute  control  of  its  own  tariffs — in  exacting  a rate 
for  106  miles  greater  than  that  exacted  east  of  Omaha  over  a 
distance  of  from  500  to  1,000  miles,  the  actual  excess  of  exac- 
tion 1)}^  the  106-mile  road  being  4:4  cents  per  hundred  pounds. 

Great  stress  is  laid  upon  the  assertion  that  a car-load  of  beer 
was  charged  a higher  rate  from  Cheyenne  to  Laramie  than  the 
entire  through  rate  on  like  carriage.  Yet  it  is  notorious  that  at 
this  time  the  Denver  Pacific  maintained  i*ates  on  its  road  which 
amounted  to  an  embargo  on  any  freight  tendered  hy  the  Union  Pa- 
cific. This  discrimination  was  made,  if  at  all,  not,  as  is  asserted, 
to  compel  the  Colorado  car-load  of  beer  to  traverse  the  whole 
line  of  the  Union  Pacific  road,  but  to  reciprocate  the  courtesies 
of  the  Denver  Pacific  in  absolutely  shutting  the  Union  Pacific 
out  of  Colorado.  If  Colorado  is  a “forbidden  laud”  to  overland 
freight  and  passengers,  it  is  due  to  the  exactions  of  the  Denver 


8 


Pacific,  over  whose  rates  tlie  Union  Pacific  or  tlie  Government 
have  no  control. 

Recently  a railroad  has  been  built  from  Cheyenne  to  Long- 
mount,  thus  making  connection  with  Denver  by  way  of  the  Colo- 
rado Central,  whicL  will  result  in  relieving  the  ])eo|)le  and  busi- 
ness of  Colorado  from  the  exactions  of  the  l)env(*r  Pacn'fic,  and 
enable  it  to  flow  to  and  from  both  the  East  and  West,  via  the 
Union  Pacific,  at  reasonable  I'ates. 

An  examination  and  com[)arison  of  the  local  tai'iffs  of  the 
Kansas  Paca'fic  will  conduct  to  like  conclusions,  as  a})pears  from 
the  following,  and  show  that  it  j)ra(^tises  the  same  discrimina- 
tions charged  u})on  us  : 

The  rates  from  Kansas  City  to  Denver,  a distance  of  639 
miles,  and  from  Kansas  City  to  Cheyenne,  a distance  of  745 
miles,  compare  as  follows  : 

K.  C.  to  D.  K.  C.  to  GlCy'ne. 


First  class $2  40  $1  90 

Second  do 2 00  1 60 

Third  do 1 75  1 30 

Fourth  do 1 40  1 25 


giving  an  average  from  Kansas  City  to  Denver — the  shorter  dis- 
tance— of  $1.88,  and  from  Kansas  City  to  Cheyenne,  the  longer 
distaiH'.e,  of  $1.51,  both  being  nearly  the  average  rate  of  the 
Union  Pacific  west  of  Cheyenne,  which  is  $1.89,  It  thus  appears 
not  only  that  the  Kansas  Pacific  practises  the  same  discrimina- 
tions with  which  we  are  charged,  but  that  we  haul  its  freight  west 
of  Cheyenne  at  a mileage  i*ate  exceeding  theirs  less  than  the 
excess  to  which  we  are  entitled  by  reason  of  the  increased  cost 
of  the  maintenance  and  operation  of  our  road,  as  hereafter  ap- 
pears, while  the  discriminations  of  the  Denver  Pacific  greatly 
exceed  those  of  either  of  the  other  companies.  An  examination 
of  the  passenger  business  interchanged  between  the  roads  will 
conduct  to  like  conclusions. 

Upon  this  subject  it  only  remains  to  notice  the  statement  con- 
tained in  Appendix  B of  the  Memorial  of  Committee  of  Bond- 
holders of  April  21,  1877,  and  in  tlie  memorial  of  citizens  of 
St.  Louis,  being  tabular  statements  of  comparative  rates  from 
Omaha  to  Ogden  and  from  Cheyenne  to  Ogden,  showing  excesses 
of  the  latter  over  the  former.  These  statements,  like  those  con- 


tained  in  tlie  senatorial  exposition  of  this  subject,  are  simply 
erroneous,  not  true  iu  fact,  as  already  appears  from  the  order  of 
General-Freight  Agent  Yiniug  already  referred  to  as  ‘‘Exhibit 
A.”  The  committee  of  bondholders,  iu  their  supplemental  me- 
morial of'-  October  10,  1877,  allege,  “ that  it  is  unlawful  for  the 
“ Union  Pacific  Railway  Company  to  charge  higher  rates  per 
“ mile  on  freight  and  passengers  received  from  or  delivered  to  the 
“ Kansas  Pacific  and  Denver  Pacific  Railroad  tlian  the  propor- 
“ tionate  mileage  charge  on  similar  business  received  from  or 
“ delivered  to  other  persons  and  corporations.”  Ko  additional 
chai’ge  is  imposed  upon  their  l)usiness  over  that  of  other  persons 
or  corporations  at  the  same  point,  and  it  is  hauled  in  most  in- 
stances as  low  per  mile  as  over  tlieirown  roads  or  any  branches 
of  tlie  Union  Pacific. 

Tlie  rates  from  Cheyenne  to  San  Francisco  of  which  the  Kan- 
sas Pacific  complain  are  materially  lower  per  ton  per  mile  than 
are  the  rates  charged  by  the  Kansas  Pacific  for  transportation 
from  Kansas  City  to  Denver,  as  is  shown  by  the  following 
table,  viz : 


Class. 

2d  Class. 

3d  Class. 

ith  Class. 

Rates  Kansas  City  to  Denver 

'...$2 

dO 

$2 

00 

$1 

75 

SI 

dO 

Rates  per  ton  per  mile 

. ..  7 

52 

6 

27 

5 

d9 

d 

39 

Rates  Cheyenne  to  San  Francisco  d 

50 

3 

75 

2 

75 

2 

25 

Rates  per  ton  per  mile 

. ..  6 

dd 

5 

d3 

3 

93 

3 

22 

Excess  of  K.  P.  rates  per  ton 

per 

mile  above  U.  P.  rates.  . . . 

...  1 

08 

8d 

1 

56 

1 

17 

Hence  it  results  that  the  Union  Pacific  has  not  discriminated 
against  the  business  of  the  Denver  Pacific  and  Kansas  Pacific 
originating  in  Colorado  and  Kansas,  but,  on  the  contrary,  has 
ti’an sported  it  at  a mileage  rate  fairly  proportionate  to  the  rate 
charged  by  those  companies  for  transportation  over  their  own 
roads. 

THE  BUSINESS  OF  MISSOURI  AND  NEIGHBORING  STATES. 

Equally  erroneous  is  the  statement  that  Missouri  and  other 
neighboring  States  are  excluded  from  commerce  and  intercourse 
with  the  Western  States  and  Territories  by  the  exactions  of  the 
Union  Pacific.  So  far  from  having  even  a semblance  of  truth, 
it  affords  the  shortest  and  best  line  from  Kansas  City,  the  eastern 


10 


termimis  of  tlio  Kaijsas  Pacific  and  Denver  Pacific,  to  tlie  West 
and  the  Pacific  ocean.  It  has  tlic  advantage  hotli  in  distance 
and  the  cliaracter  of  its  road.  From  Omaha  to  Cheyenne  tlie 
distance  is  516  miles.  From  Katisas  City  to  Cheyenne,  via 
Denver,  is  745  miles,  making  a difference  in  favor  of  'tlie  Union 
Pacdfic  of  229  miles.  From  Kansas  City  to  Cheyenne,  via 
Omalia,  is  720  miles,  thns  making  a difference  in  favor  of  the 
Omaha  route  of  25  miles  in  distance.  Therefore  the  statement 
that  those  States  arc  deprived  of  access  to  the  overland  route  by 
tlie  declination  of  tlie  Union  Pacific  to  carry  their  business 
when  received  from  tlie  Denver  Pacific  aiid  Kansas  Pacific  at 
Cheyenne  over  the  west  half  of  our  road  at  less  than  cost  of 
carriage,  (as  I shall  hereafter  show,)  thus  making  us  compensate 
tliem  foi‘  the  natural  inferiority  of  their  road,  arising  from 
its  greater  length,  is  not  only  untrue  but  alisurd.  If  the 
legislatures  of  the  States  of  Missouri  and  Illinois  have  memori- 
alized Congress  on  this  subject,  it  was  done  undoubtedly  at  the 
instance  of  some  private  interest  and  without  deliberate  con- 
sideration. It  is  an  historical  fact  suscejitible  of  absolute  proof 
that  the  resolutions  alleged  to  have  been  passed  by  the  General 
Assembly  of  Illinois  were  defeated,  and  that  after  such  defeat, 
when  that  body  had  dispersed  and  no  quorum  was  in  attendance, 
those  resolutions  were  resurrected,  and  in  some  way  certified  and 
got  before  Congress,  without  ever  having  received  the  approval 
of  tlie  General  Assembly  of  that  State.  The  Union  Pacific  is 
open  and  unobstructed,  affording  facilities  impossible  to  tiie 
Kansas  Pacific,  by  reason  of  its  greater  length  and  other  organic 
infirmities. 

Thus  far  we  fail  to  find  any  discrimination  against  the  Kan- 
sas Pacific  or  any  distinct  and  concise  statement  of  the  exact  , 
fact  constituting  our  offence  against  the  acts  of  Congress,  nor  is 
any  statement  or  definition  of  it  attempted.  It  is  simply  as- 
sumed that  we  are  by  law  required  to  do  something,  which  is 
overladen  and  measurably  concealed  under  the  oft-recurring 
phrase  pro  rate^^  and  that  in  some  way,  not  particularized, 
we  have  been  derelict  in  that  regard.  Turning,  therefore,  from 
necessity,  to  the  suit  of  the  Kansas  Pacific  Kailway  Company 
and  the  Denver  Pacific  Kailway  & Telegraph  Company,  a trans- 
script of  the  entire  record  of  which  is  before  you,  designated  as 


11 


“ Scliediile  A,”  we  are  enabled  to  extract  from  the  bill  of  com- 
plaint the  exact  nature  and  character  of  the  offence  alleged 
against  us.  It  there  appears  that  it  is  the  theory  of  the  parties 
])ressing  these  resolutions  that  it  is  obligatory  upon  the  Union 
Pacific  under  the  law  to  receive  from  tlie  Kansas  Pacific  and 
Denver  Pachfic,  at  Clieyenne,  the  point  of  junction,  witliout  re- 
gard to  the  place  of  its  origin,  all  business  brought  by  tliem, 
and  transport  it  east  or  west  to  points  on  its  road,  or  to  the  ter- 
mini of  its  road,  at  a rate  ])er  mile  obtained  b}^  dividing  the 
lowest  tlirougli  rate  of  tlie  Union  Pacific,  on  business  of  the 
same  class,  l)y  the  number  of  miles  hauled,  and  to  deliver  all 
business  destined  to  said  roads  at  Cheyenne,  witliout  regard  to 
tlie  place  of  its  origin,  at  like  rates,  and  give  it  speedy  and  like 
transit  with  its  own.  (3r,  to  simplify  the  statement  in  its  appli- 
cation to  through  freight — Cheyenne  being  cqui-distant  from 
Omaha  and  Ogden,  the  eastern  and  western  terminus  of  the  road 
— that  it  is  the  duty  of  the  Union  Pacific  to  charge  said  rail- 
road comj)anies^  “ the  Government^  and  the  for  the 

“ transportation  of  freight  and  passengers  going  to  or  from 
“ your  oratods  railroad^  between  Ogden  and  Cheyenne^  * * 

‘‘  a rate  of  freight  and  fare  not  exceedhig  one-half  of  their 

rate  for  business  and  trajfic  of  a similar  description  and 
“ character  for  the  entire  length  of  their  line  between  Ogden 
“ and  Omaha. ; that  all  excess  of  charge  over  said  rate  is  un- 
“ lawful^  and  a violation  of  the  provisions  of  said  acts  of 
“ Congress  in  that  behcdfC 

Having,  then,  at  last,  a clear,  comprehensive,  sweeping,  but 
specific  stateinent  of  our  alleged  dereliction,  we  are  now  con- 
fronted with  the  inquiiy,  Do  these  allegations  constitute  a vio- 
lation of  the  law  ? which  necessarily  leads  to  a construction  of 
the  provisions  of  the  statute  under  which  the  question  at.issue 
arises.  Assuming  for  the  present  that  these,  provisions  are 
binding  u])on  the  Union  Pacific  Company,  the  negative  of  which 
I shall  hereafter  show,  I address  myself  to  an  interpretation 
of  them. 

CONSTRUCTION  OF  SEC.  12,  ACT  1862,  AND  SEC.  15,  ACT  1864. 

Sec.  12,  act  of  1862,  (12  Statutes  at  Large,  492,)  so  far  as  it 
relates  to  this  subject,  is  as  follows  : “ The  whole  line  of  said 


12 


niilrojid  rtkI  branches  iind  t(dcgra])h  sliall  be  operated  and 
“ used  for  all  purposes  of  coininnnication,  travel,  and  transpor- 
“ tation  as  one  connected  continnous  line.” 

feec.  15,  act  of  1864,  (18  Statutes  at  Large,  358,)  is  as  follows  : 
“ That  the  several  companies  authorized  to  construct  the  afore- 
“ said  roads  are  hereby  i-eqnired  to  operate  and  use  said  roads 
and  telegraph  for  all  pur[)oses  of  communication,  travel,  and 
‘‘  ti’ansportation,  so  far  as  the  public  and  the  Government  are 
“ concerned,  as  one  continuous  line,  and  in  such  o[)eration  and 
“ use  to  afford  and  secui-e  to  each  equal  advantages  and  facili- 
“ ties  as  to  rates,  time,  and  transportation,  witliout  any  discritiii- 
“ nation  of  any  kind  in  favor  of  the  road  or  business  of  either 
“ of  said  companies,  or  adverse  to  the  road  or  business  of  any 
‘‘  or  either  of  the  others.” 

THE  HOADS  NOT  COMMON  PROPERTY. 

Any  rule  derived  from  the  consideration  of  these  sections 
which  would  have  the  effect  to  impose  upon  tlie  one  the  duties 
and  burdens  or  debts  of  the  othei’,  whicli  would  render  tlie  ojie 
liable  for  the  defaults,  failures,  or  delinquencies  of  the  other, 
or  whicli  would  consolidate  the  several  corporations,  used  in 
constituting  the  main  trunk  of  the  road  and  its  branches,  and 
convert  the  capital  lodged  under  the  protection  of  the  several 
charters  into  a common  fund,  is  obviously  and  manifestly  un- 
warranted in  law.  Else  wh_y  are  five  different  corporations, 
four  of  them  State  and  one  Federal — the  Union  Pacific — the 
Leavenworth,  Pawnee  & Western,  alias  Kansas  Pacific  E.  D. — 
the  Hannibal  and  Saint  Joseph — the  Sioux  City  and  Pacific — 
and  the  Central  Pacific — provided  to  accomplish  a work  which, 
if  it  was  to  be  the  product  of  a group  of  corporations  practically 
consolidated,  might  better  have  been  committed  to  a single 
company  at  the  outset?  Why  provide  in  the  legislation  itself 
(sec.  7,  act  1864,  p.  356,  13  Stat.)  that  ‘‘the  failure  of  au)^  one 
“ company  to  comply  fully  with  the  conditions  and  require- 
“ ments  of  this  act  or  the  act  to  which  this  is  amendatory  shall 
“ not  work  a forfeiture  of  the  rights,  privileges,  or  franchises 
“ of  any  other  company  or  companies  that  shall  have  complied 
“ with  the  same;”  or  why,  as  in  section  16  of  the  same  act, 
make  elaborate  provision  for  the  consolidation  of  these  several 


13 


companies,  by  which  the  distinctive  rigiits  of  property  invested 
under  tlie  shelter  of  each  individual  franchise  might  become 
converted  into  a common  fund,  but  that  onl}^  by  tbe  consent  of 
tlie  stockholders  of  all  ? That  Congress  could  have  contem- 
plated any  construction  of  these  acts  which  practically  consoli- 
dated the  property  of  these  diverse  corporations,  without  pro- 
viding a common  and  single  management,  and  merging  them 
into  one,  with  corporate  power  to  administer  the  entire  property, 
outruns  credulity,  and  is  too  absurd  for  discussion.  Sucb  a 
construction  would  be  equivalent  to  a declaration  that  tbe 
strongest  corporation,  the  one  freest  from  organic  infirmities 
and  under  tbe  wisest  management,  should  bear  the  burdens, 
assume  the  weaknesses,  pay  the  debts,  and  become  the  sponsor 
of  the  other,  in  i*espect  to  its  duties  and  obligations  to  the  Gov- 
ernment and  the  public.  We  must  look,  then,  for  some  inter- 
pretation which,  while  it  will  not  communize^’’  the  vast  prop- 
erty sheltered  by  these  different  franchises,  will  insure  such  an 
administration  of  them  as  to  afford  and  secure  to  each  equal 
‘‘  advantages  and  facilities  as  to  rates^  time,  and  transj)ortation, 
“ without  any  discrimination  of  any  kind  in  favor  of  the  road 
‘‘  or  business  of  any  or^  either  of  said  comqoanies,  or  adverse  to 
“ the  road  or  business  of  any  or  either  of  the  othersP 

THE  PHRASE  ‘‘  PRO  RATE.” 

In  all  the  papers  referring  to  this  controversy  filed  in  the 
dc[)artments  and  in  public  speeches  and  memorials  to  either 
house  of  Congress,  it  is  insisted  that  the  Union  Pacific  is  under 
legal  obligation  to  pro  rate^^  with  the  Kansas  Pacific.  The 
])hrasc  recui’S  too  frequently  to  call  for  refei’ence  to  any  partic- 
ular person  or  paper.  These  words  are  not  found  in  the  statute, 
and  whatever  they  mean,  if  they  are  to  control  us,  they  must 
be  injected  into  it  by  judicial  construction. 

If  we  are  to  consider  the  signification  of  the  words  alone, 
the  demand  of  tbe  Kansas  Pacific,  strictly  speakiipg,  means 
this  : that  the  lowest  through  rate  of  the  Union  Pacific  from 
Omaha  to  Ogden,  a distance  of  1,032  miles,  shall  be  equallj^ 
apportioned,  mile  for  mile,  over  the  entire  distance  from 
Kansas  City  to  Ogden,  a distance  c»f  1,261  miles,  or  229  miles 
greater  than  from  Omaha  to  Ogden.  This  would  compel  the 


14 


Uinon  Pacific  to  carry  tlie  business  of  the  Kansas  Pacific 
between  Clieycnne  and  Ogden  for  a less  sum  ]>er  mile  than  it 
would  receive  on  its  own  business  east  of  that  point.  A simple 
calculation  will  sliow  that  by  tliis  rule,  wliile  on  its  own  first- 
class  passengers  tlie  Union  Pacific  would  receive,  say,  five  cents 
per  mile  east  of  Clieyenne,  for  tlie  same  passenger  brought  to  it 
by  the  Kansas  Pacific  it  would  receive  four  cents  per  mile 
west  of  Cheyenne,  thus  forcing  upon  the  Union  Pacific  a gross 
discrimination  e gainst  itself  in  favor  of  tlie  Kansas  Pacific. 
This  construction  of  the  phrase,  according  to  its  literal  significa- 
tion, is  too  obscure  to  deserve  furtlier  consideration. 

The  section  under  consideration  must  be  construed  with  refer- 
ence to  the  ])ractices  and  usages  and  recognized  modes  of  busi- 
ness in  vogue  in  railroad  management  at  the  time  the  act  was 
passed.  I assert,  as  a fact  not  susceptible  of  refutation,  that 
the  absolute  obligation  to  ‘‘pro  rate,”  eitlier  in  its  literal  signi 
fication  or  in  the  sense  ascribed  to  it  by  our  antagonists,  accord- 
ing to  distance,  is  a thing  unknown  in  railroad  management. 
The  apportionment  of  rates  upon  no  two  roads  in  the  United 
States  is  made  on  that  basis,  except  as  it  is  indicated  and  justi- 
fied by  the  character  of  the  roads.  ADowance  is  universally 
made  for  difference  in  grades,  difference  in  curvature,  difference 
in  local  or  thi’ough  business,  cost  of  fuel  and  water  and  labor, 
and  the  numerous  elements  which  enter  into  the  cost  of  main- 
tenance and  0})eration  of  railroads.  Kor  can  it  be  otherwise, 
until  some  process  is  discovered  to  equalize  what  nature  has 
made  unequal — to  convert  mountains  into  plains,  to  make  crook- 
edness straight,  or  in  some  miraculous  manner  obliterate  the  in- 
equalities inherent  in  different  works  of  the  Creator. 

The  phrase  “ pro  rate,”  then,  not  being  found  in  the  law — not 
recognized  or  applied  in  actual  business — and  leading  to  out- 
rageous discriminations  against  the  Union  Pacific,  is  not  to  be 
incorporated  into  the  statute,  except  by  clear  and  emphatic  words, 
Irresistibly  leading  to  that  result.  Notwithstanding,  it  has  been 
repeatedly  and  often  assumed  that  we  are  required  to  pro-rate 
with  the  Kansas  Pacific,  but  never  argued^  we  insist  tliat 
iteration  and  reiteration  not  impose  upon  us  that 

obligation,  but  that  such  a duty  must  be  derived  from  the  lam- 
guage  of  the  statute jxlone. 


15 


Turning,  then,  to  the  statute,  it  is  manifest  from  its  language 
that  it  declares  the  rule  of  non-discrimination  only.  In  the 
sense  most  unfavorable  to  us  it  prohibits  discrimination  against 
the  branches^  or  either  of  them>^  in  resp>ect  to  rates,  time,  and 
transportation,  even  in  favor  of  the  main  trunk,  viz.,  the  Union 
Pacific.  No  other  rule  can  possibly  be  derived  from  the 
language  used,  and  the  question  thus  reduces  itself  to  the 
simple  inquiry.  Will  the  apportioment  of  the  through  rate 
claimed  by  the  Kansas  Pacific  operate  as  and  result  in  a dis- 
crimination against  the  Union  Pacific  and  in  favor  of  tlie  Kansas 
Pacific  ? If  so,  it  is  as  completely  within  the  inhibition  of  the 
statute  as  if  against  the  latter  company  and  in  favor  of  the 
fonner.  It  has  been  said  tliat  in  construing  a statute  its 
words  must  be  given  their  ordinary  and  obvious  import  witliout 
regard  to  the  results  involved  ; but  this  is  oidy  measurably  true. 
Where  a literal  construction  involves  consequences  palpably  not 
designed  by  the  legislative  power,  or  when,  as  in  this  case,  the 
effect,  the  result,  the  consequence — viz.,  discrimination  or  non-  ' 
discrimination — is  made  the  actual  and  absolute  test  of  con- 
struction, the  rule  invoked  has  no  application.  Whatever  maj’  l>e 
the  true  construction  of  the  statute  under  consideration,  any 
construction  which  can  be  demonstrated  to  establish  a rule 
whicli  would  necessarily  inflict  gross,  palpable,  and  destructive 
discrimination  upon  tlie  Union  Pacific  must  be  not  only  rejected, 
but  outlawed,  as  unworthy  of  serious  consideration. 

CHARACTER  OF  UNION  PACIFIC  WEST  OF  CHEYENNE. 

Assuming,  then,  what  is  a recognized  fact  of  railroad  man- 
agement, that  tlie  cost  of  operating  and  maintaining  a railroad 
depends  upon  grades,  curvature,  fuel  and  water  supply,  climate, 
remoteness  from  base  of  supplies  and  material,  and  other  ele- 
ments not  necessary  to  mention,  and  bearing  in  mind  that  the 
rate  of  fare  and  freight  claimed  by  the  Kansas  Pacific  is  a mile 
age  rate  of  the  lowest  through  competing  rate  from  Omaha  to 
Ogden,  I call  attention  to  the  following  indisputable  facts, 
showing  beyond  controversy  that  nearly,  if  not  quite  two-thirds, 
of  that  rate  is  earned  on  the  west  half  of  the  Union  Pacific,  viz., 
that  portion  traversed  by  the  business  of  the  Kansas  Pacific. 


16 


Tlie  cast  half  of  the  road  is  built  through  tlie  Platte  V'alley 
and  the  Lodge  Pole  Yalley,  along  a level  plain,  witliout  curva- 
ture, and  at  a gradual  and  regular  ascent  of  about  ten  feet  per 
mile.  The  western  lialf  crosses  three  ranges  of  mountains — the 
E-ocky  Mountain  range,  tlie  Black  Hills  range,  and  tlie  Wa- 
satcli  range,  and  encounters  the  manifold  difficulties  of  opera- 
tion and  maintenance  incident  to  a tnountainous,  remote,  unin- 
liabited,  storm-swept  country.  The  cliaracter  of  the  two  divis- 
ions of  the  road  is  best  sliown  by  tlie  following  tacts,  shown 
by  the  map  before  you,  marked  “ Schedule  B.”  The  aggre- 
gate curvature  east  of  Cheyenne  is  2,504  degrees  ; west  of 
Cheyenne,  21,080  degrees.  Maximum  grades  per  mile,  east  of 
Cheyenne,  thirty-five  feet  per  mile ; west  of  Cheyenne,  ninety 
feet  pei‘  mile.  Ca|)acity  of  standard  engine,  east  of  Cheyenne, 
22  cars ; west  of  Cheyenne,  9 cars.  Proportion  of  engine 
expenses  to  total  operating  expenses,  east  of  Cheyenne,  32  per 
cent.;  west  of  Cheyenne,  51  per  cent.  Total  operating  expenses 
per  train  per  mile,  east  of  Cheyenne,  87  cents  ; west  of  Chey- 
enne, $1.34.  It  is  a fact  conceded  by  civil  engineers  that  each 
21  feet  of  ascending  grade  costs  as  much  in  operation  as  one 
mile  of  level  road,  and  that  527°  of  curvature  involves  an  ex- 
penditure equal  to  one  mile  of  straight  level  road.  The  total 
ascent  from  Omaha  to  Cheyenne,  westward,  is  5,454  feet,  equal 
to  260  miles  of  added  level  road.  The  total  ascent  from  Chey- 
enne to  Omaha,  eastward,  is  379  feet,  equal  to  18  miles  of 
added  level  road.  The  total  curvature  is  2,504°,  equal  to  5 
miles  of  added  level  road,  making  the  additional  road  arising 
from  grade  and  curvature  equal  to  283  miles.  The  total  as- 
cent from  Cheyenne  to  Ogden,  westward,  equals  6,622  feet, 
equal  to  315  miles  of  added  road.  From  Ogden  to  Cheyenne, 
eastward,  the  total  ascent  is  8,279  feet,  equal  to  394  miles  of 
added  road.  The  total  curvature  is  21,180°,  equal  to  40  miles 
of  added  road.  The  entire  additional  road  arising  from  grade 
and  curvature  equals  749  miles,  which  gives  an  excess  of  actual 
distance  arising  from  grades  and  curvatures,  between  Cheyenne 
and  Ogden  over  between  Omaha  and  Cheyenne,  of  466  miles. 
A very  simple  calculation,  based  on  these  facts,  will  demon- 
strate the  mathematical  and  absolutely  correct  result,  that,  of 
the  through  rate  from  Omaha  to  Ogden,  move  than  two-thirds 


17 


is  earned  between  Cheyenne  and  Ogden  ^ and  that  to  divkie 
that  rate  eqtially  at  Cheyenne  vjould  leave  the  loest  half  of 
the  road  not  only  without  profit^  hut  with  an  absolute  loss. 
Yet  tliis  is  tlie  exact  demand  of  the  Kansas  Pacific.. 

HOW  THE  RULE  DEMANDED  BY  THE  KANSAS  RxiCIFIC  WILL  DIS- 
CRIMINATE AGAINST  THE  UNION  PACIFIC. 

The  following  are  fair  illustrations  of  the  practical  eff(;ct  of 
tlie  eonstriiction  contended  for.  The  thi-ongli  rate  on  a car 
load  of  merchandise  is  $100.  Of  this  amount  $60  is  eai-ned 
west  of  Cheyenne  and  $-1:0  east,  and  the  profit  of  the  carriage  is 
$10  west  and  $10  east.  The  Kansas  Pacific  demands  that  its 
business  be  carried  over  the  west  iialf  of  the  road  at  one-lialf 
the  through  rate,  $50,  which  is  simply  the  cost  of  carriage., 
wliile  it  receives  $10  more  on  the  same  business  east  of  Chey- 
enne than  the  Union  Pacific.  Suppose  it  reduces  its  rate  $10, 
as  it  may  do,  and  still  receive  the  Union  Pacific  rate.  This 
reduction  will  take  tlie  business,  unless  met  by  the  Union 
Pacific,.  To  meet  it  a reduction  of  $10  on  the  through  rate  is 
made,  one-lialf  of  which,  $5,  applies  to  the  west  lialf  of  the 
road,  making  one-half  the  through  rate  $-1:5,  at  which  rate  the 
Kansas  Pacific  insists  its  business  must  be  transported  under 
its  rule,  or  in  other  words,  at  $5  less  than  the  cost  of  carria<^»’e. 
It  is  easy  to  see  that  successive  reductions  must  increase  this 
loss,  until  in  self-defence  the  through  rate,  which  is  determined 
by  the  competition  of  the  Pacific;  Mail  Steamship  Company, 
must  be  abolished,  and  the  intercontinental  business  given  uj), 
except  upon  a limited  amount  of  light  and  costly  freight, 
thus  endangering  the  solvenc}"  and  existence  itself  of  the  chief 
member  of  the  Pacific  railroad  system. 

Or  take  another  illustration  : the  cost  of  carriage  of  a pas- 
senger being  east  of  Cheyenne  3 cents  per  mile,  and  west  of 
Cheyenne  5 cents  per  mile,  the  through  rate  is  fixed  at  an 
average  of  d cents  per  mile,  being  1 cent  less  than  the  cost  of 
carriage  over  that  portion  of  the  road  traversed  by  Kansas 
Pacific  passengers,  while  giving  that  company  1 cent  per  mile 
more  east  of  Cheyenne  than  received  by  the  Union  Pacific,  thus 
enabling  it  to  further  cut  its  rate,  to  which  the  Union  Pacific 
must  respond  by  cutting  its  through  rate.,  one-half  of  which 


18 


enures  to  tlie  benefit  of  the  KansMS  Paeific,  tlins  enablino:  it  to 
continue  tlie  process  to  the  destruction  of  the  Union  Pacific, 
thus  infii(ttin<^  the  grossest  discrimination. 

Again,  the  througli  rate  from  Omalia  or  Kansas  City  to 
Ogden  pel*  c-ai*-load  of  mercliandise,  say  : 


sixty  ])er  cent,  of  tlie  cost  of  carriage  from  Omalia  to  Ogden 
is  imuirred  west  of  Cheyenne,  or  $-i8.00. 

Now,  suppose  the  Kansas  Pacific,  wliicli  is  left  free  as  to 
rates,  should  cut  the  through  rate  to  $90,  it  would  follow — if  the 
Union  Pacific  meeds  that  rate — that  hut  half  the  through  rate 
could  he  charged  west  of  Cheyenne,  or  $45.00,  which  is  $3  less 
than  the  cost  of  hauling — a loss  of  that  amount. 

Take  the  emigrant  rate  of  $45  from  Omaha  to  San  Francisco, 
with  uniform  i*ate  from  Kansas  City  to  San  Francisco,  and  ap- 
ply the  Kansas  Pacific  rata  basis  of  divisions  to  such  rate, 
and  we  have  as  the  re'sult  $17. ‘25  earmal  by  Kansas  Pacific 
between  Kansas  City  and  Cheyenne,  while  the  Union  Pacific 
will  get  but  $7.05  for  the  haul  from  Cheyenne  to  Ogden  over 
its  mountain  division. 

Fifty-four  per  cent,  of  $45  earned  east  of  Ogden,  or  $24.30. 
Now,  if  the  Union  Pacifii^  competes  from  Kansas  City,  it  must 
first  pay  $10.20  to  get  its  passenger  to  Omaha,  which  leaves  it 
through  rate  to  Ogden  $14.10 — 

Of  which  the  Kansas  Pacific  must  pay  the  Union  Pacific 

one-half,  or $7  05 

Which  leaves  the  Kansas  Pacific’s  proportion 17  25 

$24  30 

Og  den  to  Cheyenne,  $50.  Che^^enne  to  Omaha,  $50. 

Cheyenne  to  Kansas  City,  $50. 

If  the  $100  through  rate  he  cut  by  Kansas  Pacific  $10, 
and  Union  Pacific  follows,  this  is  the  result: 


Coat  of  trampoi'tation. 
$100 $80  00 


Profit. 
$20  00 


45. 


45  U.  P. 
40  K.  P. 


45 

45  U.  P.  to  Ogden. 


45 

40  K.  P.  to  Ogden. 


$90 


$85 


19 


This  still  leaves  tlie  Union  Pacific  tliroiigli  rate  $5  above  the 
Kansas  Pacific.  To  meet  this  the  Union  Pacific  reduces  to  $85, 
witli  tliis  result : 

$42  50  $42  50  U.  P. 

$40  K.  P. 

$42  50  $42  50 

42  50  U.  P.  40  00  K.  P. 

$85  00  $82  50 

Kansas  Pacific  is  still  $2.50  below  the  Union  Pacific  without 
itself  cutting  rates  f urther. 

The  effect  of  the  construction  demanded  is  l)est  illustrated, 
perhaps,  by  the  following  plain  statement : 

A standard  engine  starts  from  Omalia  and  hauls  to  Cheyenne 
22  loaded  cars.  At  Clieyenne  it  must  either  drop  13  of  these 
cars  and  make  two  trips  to  haul  its  train  to  Ogden,  or  take  on 
an  additional  engine  of  increased  powei’,  with  the  manifold  in- 
(treased  expenses,  to  get  its  train  to  Ogden.  It  is  obvious  the 
expense  mnst  be  nearly  twice  as  great  west  as  east  of  Cheyenne. 
Yet  the  Kansas  Pacific,  having  the  same  numl)ei’  of  cars  at 
Cheyenne,  insists  tliat  it  sliall  be  hauled  to  Ogden  at  the  same 
cost  as  from  Omaha  to  Cheyenne.  This  is  the  lengtli  and 
breadth  of  their  demand,  simplj’  stated. 

The  discriminating  and  destructive  operation  of  the  rule  con- 
tended for  against  the  Union  Pacific,  as  well  as  the  falsehood 
of  the  alleged  discriminations  against  the  Kansas  Pacific,  is 
further  strikingly  set  forth  in  the  following  letter,  tlie  import 
ance  of  which  justifies  its  incorporation  with  the  l)ody  of  this 
statement : 

Omaha,  December  13,  1874. 

A.  J.  PoppLETON,  Esq., 

Washington,  D.  C.  : 

Dear  Sir  : 1 desire  briefly  to  direct  your  attention  to  certain 
charges  of  discrimination  in  Union  Pacific  passenger  rates  be- 
tween Omalia  and  Ogden  and  Cheyenne  and  Ogden,  against 
passengers  from  Missouri,  Kansas,  Colorado,  etc.,  made  by  the 
press  and  certain  memorialists  of  St.  Louis,  and  notably  in  the 
speech  of  the  Hon.  J.  B.  Chaffee,  of  Colorado,  delivered  in  the 
United  States  Senate,  on  the  thirteenth  of  last  month.  Mr. 
Chaffee  says  : 

“ By  refusing  to  pro-rate  and  give  equal  advantages  to  the 


20 


“ l)raiicli  linos,  as  required  by  the  act  of  incorporation,  all  that 
‘‘  part  of  the  c.ountry  north  or  south  of  a direct  raih-oad  c.onnec.- 
“ tion  with  the  eastern  terminus  of  tile  main  line  is  compelled 
“ to  make  connection  at  (Omaha,  for  the  tariff*  rates  for  passen- 
(/ers  and  freight  are  more  from  any  j) obit  loest  of  Omaha^  at 
the  point  of  connection  of  any  branchy  than  from  Omaha  to 
“ Oyden. 

“These  unjust,  illei^al,  and  prohihitory  discriminations  are 
“ very  severely  felt  hy  the  people  of  Colorado,  Kansas,  Mis- 
“souri,  and  all  States  south  of  the  Ohio  I’iver.” 

1 am  jit  loss  to  conjecture  from  what  sourc-es  the  houorahle 
gentleman  obtained  information  on  whicdi  to  hnse  these  state- 
ments. Our  otficial  passenger  rates  now  in  force  have  heen  [)uh- 
lished  and  in  the  hands  of  connecting  railroad  companies  and 
the  public  since  1872,  and  I defy  him  or  any  one  else  to  show  a 
single  instance  in  which  we  have  (diarged  a higher  passenger 
rate  from  any  ])oint  west  of  Omaha  to  Ogden  than  from  Omaha 
to  the  same  destination. 

Piissenger  rates  from  Kansas  City,  the  eastern  terminus  of 
the  Kansas  Pacitic  Kailroad,  to  the  western  terminus  of  the 
Union  Pacific  Railroad,  (Ogden,)  and  to  all  points  west  thereof 
to  which  rates  are  l>ased  on  local  tariff's,  have  always  heen  made 
way  of  Omaha,  it  l)eing  twenty-five  miles  the  shorter  route, 
and  the  sum  of  such  tariffs  being  less  through  Om^dia  than 
through  Denver  from  Kansas  City  to  Cheyenne — the  common 
point  to  both  roads. 

These  rates  are  applied  without  discrimination  in  all  the  ter- 
ritory referred  to  by  Mr.  Chaffee,  and  are  divided  between  the 
lines  in  interest  as  follows: 


Via  Omaha. 

Isi  Clasf,. 

2d  Class. 

Emigrant. 

Kansas  Citv  to  Omaha 

$10  50 

$10  50 

$10  00 

Omaha  to  Cheyenne 

31 

00 

24  00 

15  00 

Chej^enne  to  Ogden 

4:6 

50 

,36  00 

25  00 

Through  rates 

$88 

00 

$70  50 

$50  00 

Via  Denver. 

Isi  Class. 

2d  Class. 

Emigrant. 

Kansas  City  to  Cheyenne 

. ...  $4:1 

50 

$34  50 

$25  00 

Chejmnne  to  Ogden 

4:6 

50 

36  00 

25  00 

Through  rates 

$88 

00 

$70  50 

$50  00 

Observe  that  the  rates  are  the  same  by  both  routes,  and  that 
the  passenger  who  pays  Ids  fare  from  Kansas  City  to  Cheyenne 
by  either  the  Union  Pacific  or  Kansas  Pacific  line,  and  pays 
again  from  that  point  to  Ogden,  gets  his  passage  at  the  same 
cost,  regardless  of  the  route  hy  which  he  reached  Cheyenne,  as 


21 


if  he  Imr]  })iir(;liase(;l  n tlirongli  ticket  from  Kansas  City  to  Ogden. 
These  rates  neitlier  discriminate  against  the  Kansas  Pacific,  tlie 
public,  nor  the  GoverntJieiit.  But  if  we  a])ply  to  tins  same  pas- 
senger business  the  imle  for  dividing  rates  l)etween  tlie  Kansas 
Pacific  and  Union  Pacific  contended  for  l)v  the  former  in  Con- 
gress and  in  court,  namely,  a mileage  rata  between  Chey- 
enne and  Ogden  of  the  luxoest  through  rate  hetiueen  Omaha 
and  Ogden^  it  vill  give  the  following  discriminating  results 
against  tlie  Union  Pacific  and  in  favor  of  the  Kansas  Pacific: 


Kansas  Oily  to  Ogden,  via  Denver.  !;><  Class. 

Kansas  City  to  Cheyenne,  K.  P.  pro- 

2d  Class. 

Emigrant. 

j)ortion $68 

56 

$51  60 

$40 

50 

Cheyenne  to  Ogden,  U.  P.  proportion  19 

±4: 

18  90 

9 

45 

Through  rates $88 

00 

$70  50 

$50 

00 

To  further  illustrate  the  absurdit}’  as  well  as  the  rank  and 
rninons  disoi-iinination  against  the  Union  Pacific  Company 
which  the rata,  demands  of  the  Kansas  Pacific  involve,  let 
me  again  ask  your  attention  to  the  division  of  rates  which 
wonld  follow  the  enforcement  of  such  demands.  Take  for  ex- 
ample existing  rates  of  all  classes  from  St.  Lonis  to  San  Fran- 
cisco, via  Omaha,  which  are  now  divided  thus  : 


St.  Louis,  to  Omaha 

Isi  Class. 

$16  00 

2d  Class. 

$13  00 

Emigrant. 

$10  50 

Omaha  to  Oguen 

51  00 

40  50 

24 

30 

Ogden  to  San  Fi-an cisco 

46  00 

34  50 

20 

TO 

Through  rates 

$116  00 

$88  00 

$55 

50 

Kow  apply  the  mileage  rata  rule,  before  refen*ed  to,  in 
dividing  these  rates  from  St.  Louis  to  San  Francisco  by  the 
Kansas  Pacific  route,  and  it  will  result  thus  : 


St.  Louis  to  Kansas  City 


Ogden  to  San  Francisco,  C.  P. 


Isi  Class. 

2fl  Class. 

Emigrant. 

. $11 

00 

89 

00 

89 

00 

)- 

52 

44 

27 

90 

20 

95 

1.  19 

44 

18 

90 

9 

45 

33 

12 

32 

20 

16 

10 

S116 

00 

$88 

00 

$55 

50 

Similar  comparison  of  passenger  rates  and  divisions  might 
be  made  from  nearly  all  principal  points  in  the  country  with 
corresponding  results,  but  I think  the  foregoing  are  sufficient 
to  demonstrate  the  iniquity  of  the  Kansas  Pacific  Company’s 
“ discriminating  rata  claims.  As  you  are  well  aware,  it 


22 


is  tlieso  unjust  demaucls  of  the  latter  com])auy  wliicli  have  al- 
ways barred  tlie  way  in  every  attempt  to  liarniouize  the  rela- 
tions of  tlie  two  roads.  There  are  other  statements  as  to  pas- 
seiii;-er  matters  in  the  Colorado  Senator’s  speech  which  are 
incorrect  in  point  of  fact,  and  otlier  statements  of  fact  whicli 
are  ei*roncous  in  their  application,  but  I have  not  time  now  to 
further  refer  to  tliem. 

Yours,  truly, 

THOS.  L.  KIMBALL, 

Oen'l  Passenger  and  Ticket  Agent,  U.  P.  R.R. 

It  is  difficmlt  to  understand  how  sane  men  can  seriously  cdaim 
tliat  a proliibition  u])on  the  Union  Pacific  not  to  discriminate 
against  the  Kansas  Pacific  gives  that  com))any  tlie  right  to  liave 
its  tVeightand  passengers  hauled  over  that  portion  of  the  Union 
Pacific  which  the  Government  itself  has  recognized  as  most 
difficult  of  consti-uction,  maintenance,  and  operation,  at  an 
actual  loss.  A cdaim  tliat  we  should  make  a fixed  annual  con- 
tribution to  the  treasury  of  the  Kansas  Pacific  would 
be  equally  just,  equally  well  founded  in  the  law,  and  would 
have  the  merit  of  intelligibility  and  frankness.  The  truth  is 
that  this  outrageous  demand  originates  in  a desperate  effort  to 
escape  from  the  consequences  of  an  organic  infirmity  of  their 
road.  The  distance  from  Kansas  City  to  Cheyenne  exceeding 
that  from  Omaha  to  Cheyenne  by  229  miles,  and  the  line  being 
of‘  an  inferior  character,  it  never  can  compete  with  the  Union 
Pacific  or  share  in  any  considerable  degree  in  the  through  busi- 
ness, unless  by  some  legislative  device  its  inferiority  can  be 
made  a burden  upon  the  Union  Pacific  by  com|)elling  that  com- 
pany to  make  good  the  deficiency  in  its  natural  earnings  and 
resources. 

LEGAL  RELATION  OF  THE  KANSAS  PACIFIC  TO  THE  UNION  PACIFIC. 

But  we  deny  that  the  Kansas  Pacific,  as  built,  is  a branch  of 
the  Union  Pacific,  in  any  such  sense  as  to  entitle  it  to  share  the 
benefits  of  section  15,  act  1864:,  as  against  the  main  trunk  of  the 
latter  road. 

The  act  of  July  1,  1862,  which  originated  the  system  of  Pa- 
cific railroads,  authorized  a trunk  road  from  a point  on  the 
100th  meridian  westward  to  the  eastern  boundary  of  California. 
From  that  point  eastward  to  the  Alissouri  river,  at  such  point 


23 


as  inight  l)e  designated  by  tlie  President,  it  autliorized  a branch 
to  he  built  by  the  Union  Pacific  Cornjoany.  The  same  section 
autliorized  and  i-equired  tlie  same  company  to  construct  a 
brancli  from  Sioux  City  to  connect  with  the  Union  Pacific  at  a 
point  not  farther  west  tlian  the  100th  meridian.  We  have,  then, 
by  this  act  a trunk  road,  beginning  at  the  100th  meridian, 

and  extending  eastward  from  the  100th  meridian  tu  Sioux  City, 
Omaha,  and  Kansas  City  res[)ectively. 

Stop[)ing  for  a moment  here,  what  would  have  been  the  (ain- 
struction  of  tlie  sections  out  of  which  this  (amtroversy  springs 
if  the  roads  ha<l  been  built  as  required  by  the  act  of  1862  ? 
The  Kansas  Paihfic  claims  that  the  Union  Paca’tic  discriminates 
against  it  l>y  taking  upon  its  main  trunk  a better  i*ate  than  it  al- 
lows the  Kansas  Pacific.  Ko  sucfi  (piestion  could  have  arisen 
under  the  a(',t  of  1862,  for  the  reason  that  no  paiaillel  road  whicli 
could  be  in  efiect  a rival  to  the  main  trunk  was  authorized.  The 
question  of  discrimination  in  favor  of  the  trunk  line  as  against 
a branch  could  not  have  arisen.  The  broadest  construction  which 
could  have  been  maintained  would  have  been  that  the  trunkline 
should  not  disc,riminate  against  either  of  the  bramdies  in  favor 
of  the  other,  but  should  treat  all  alike  in  (amnections,  time,  and 
tariffs.  All  the  branches  would  have  been  feeders  of  the  main 
trunk  and  none  of  them  rivals  to  it  or  any  part  of  it.  Tlie 
claim  of  the  Kansas  Pacific  is  that  having  been  authorized^  not 
required^  to  connect  its  road  with  the  Union  Pacific  at  a point  270 
miles  west  of  its  eastern  terminus,  on  the  100th  meridian,  it  may 
claim  not  onU  equal  advantages  and  facilities  with  the  branches, 
but  with  the  main  trunk.  Is  it  credible  that  Congress — the 
United  States  having  a direct  pecuniary  interest  of  $27,000,000 
and  only  $6,000,000  in  the  Kansas  Pacific — intended  to  place  the 
former  company  where  it  could  be  gradually  but  eftectually  de- 
stroyed, by  being  compelled  to  carry  the  business  received  tVom 
and  delivei-ed  to  the  Kansas  Pacific  at  a loss  ? Ko  such  result 
could  spring  from  the  act  of  1862,  and  if  such  obligations  are 
to  be  established,  they  must  be  derived  from  subsequent  legis- 
lation. 

By  section  9,  act  1861:,  the  Kansas  Pacific  was  authorized  to 
connec.r  its  road  with  the  Union  Pacific,  at  any  point  west  of  the 
initial  point  on  the  lOOtli  meridian  ; but  in  making  such  de- 


24 


parturo  it  was  expressly  provided  that  it  should  he  “ suhjec^t  to 
all  the  (‘.onditioiis  and  restia'ctions  of  this  ac-t.”  One  of  these 
(conditions  was  that  it  should  designate  its  J’onte  and  file  a nia]) 
thereof  witliin  three  years  from  the  ])assage  of  the  a(ct  of  18'02. 
This  it  failed  to  do,  and  thereby  lost  tlie  right  to  diverge  from 
its  original  route,  and  elected  to  build  to  the  100th  meridian. 
By  this  failure  it  forfeited  tlie  I’ight  and  }H»wer  to  make  its  (con- 
nection with  the  Union  Pacific  at  any  other  point  than  tlie  100th 
merivlian,  and  to  any  advantages  and  facilities  beyond  those 
accruing  from  a connection  at  the  lOCth  meridian.  This  was 
held  by  tlie  Secretary  of  the  Interior  in  Kansas  Pacific  Railway 
vs.  Union  Pacific  Railway,  (southern  branch  :)  “ The  company, 
“ after  the  passage  of  the  act  of  1864,  had  its  option  to  go  to 
‘‘  the  lOOtli  meridian  or  to  the  west  of  that  meridian.  It  could 
‘‘  not  do  botli.  It  was  oliliged  to  elect  within  the  three  years. 
“ It  did  so,  and  elected  to  go  to  the  100th  meridian.  Having 
“ done  so,  it  was,  as  to  this  subject,  functus  officio.  It  could 
“ not,  therefore,  change  its  route  without  the  consent  of  Con- 
gross.” 

Wliatever  rights  and  powers  tlie  Kansas  Pacific  possesses  in 
respect  to  the  interchange  of  business  with  the  Union  Pacific  at 
Cheyenne  it  must  derive  from  subsequent  legislation  of  Con- 
gress,  not  accej)ted  by  the  latter  comj)any. 

But  three  subsequent  acts  of  Congress,  viz.,  the  act  of  July 
3,  1866,  (14  Stat.,  p.  79  ;)  March  3,  1869,  (15  Stat.,  324;)  June 
20,  1874,  none  of  which  have  been  accepted  by  the  Union  Pa- 
cific, touch  this  question.  The  first  is  silent  upon  the  subject 
of  this  controversy.  The  second  is  relied  upon  as  conferring  the 
rights  claimed  in  the  second  section  by  the  following  language  : 
‘‘All  the  provisions  of  law  for  the  operation  of  the  Union  Pa- 
“ cific  Railroad,  its  branches  and  connections,  as  a continuous 
“ line,  without  discrimination,  shall  apply  the  same  as  if  the 
“ road  from  Denver  to  Cheyenne  liad  been  constructed  by  the 
“ Union  Pacific  Railway  Company,  eastern  division;  but  noth 
‘‘  ing  herein  shall  authorize  the  said  eastern  division  to  operate 
“ the  road  or  fix  the  rates  of  tariff  for  the  Denver  Pacific.” 

This  section,  in  express  language,  enjoins  upon  the  Union 
Pacific  compliance  only  with  that  portion  of  sections  12  and  15 
which  requires  operation  as  a “ continuous  line,”  conceding  to 


2o 


the  Denver  Pncific  the  ])Ower  to  opei’ate  its  road  in  its  own  way 
and  to  fix  its  own  tariffs.  As  tlie  act  of  1874  does  not  take 
away  this  right,  it  is  manifest  tliat  there  can  be  no  reciprocity 
in  tiie  obligations  sought  to  be  imposed  on  us.  The  utmost,  tlien, 
that  can  be  claimed,  is,  that  we  should  receive  and  forward  tlie 
business  of  tliose  two  roads  on  the  same  terms  as  the  business 
of  tlie  otliei’  branches.  So  far  as  aii}^  obligation  to  receive  and 
forward  tlieir  l)usiness  on  tlie  same  terms  and  conditions  as  the 
business  of  the  main  truidv  is  concerned,  this  legislation  fails  to 
connect  the  roads  on  tlie  terms  of  mutual  tariffs  and  operation. 
The  Denver  Pacific  has  unlimited  control  of  its  own  road  and 
tariffs.  Keither  tlie  Union  Pacific  nor  Kansas  Pacific  can  dictate 
its  operation  or  its  tariffs.  The  connection  is  broken.  The  Kan- 
sas Pacific  has  not  connected  itself  with  the  Union  Pacific.  It  is 
neither  a hranch  nor  connection  of  the  Union  Pacific,  and  can 
only  i-eacli  it  over  the  Denver  Pacific,  which  is  a territoi-ial  cor- 
poration, not  created  by  Congress,  and  to  which  is  expressly 
conceded,  by  act  of  Congress,  exclusive  control  of  its  own  oper- 
ation and  tariffs. 

But  it  has  been  said  we  accepted  the  act  of  1864,  the  ninth 
section  of  which  authorized  a connection  west  of  the  lOOtli 
meridian.  While  this  may  be  time,  though  formal  acceptance 
was  never  made,  it  has  been  shown  that  the  Kansas  Pacific 
failed  to  make  its  connection  under  that  act  and  elected  to  con- 
nect at  the  100th  meridian.  This  present  connection  is  made 
solely  by  authority  of  the  acts  of  July  3,  1866,  and  March  3, 
1869,  th(5  provisions  of  none  of  which  has  the  Union  Pacific 
Company  accejited,  expressly  or  by  necessary  implication.  The 
ac.t  of  June  20,  1874,  which  contains  a legislative  declaration 
that  the  Denver  Pacific  shall  be  deemed  and  taken  to  be  part 
of  the  Kansas  Pacific,  is  of  the  same  character.  All  are  sought 
to  he  im])Osed  upon  the  Union  Pacific  without  its  assent,  and 
if  so  construed  as  to  impair  and  diminish  the  value  of  the  pro- 
perty invested  under  its  franchise,  under  late  decisions  of  the 
Supreme  Court  they  are  clearly  void  We  say,  then,  we  have 
never  consented  that  the  Kansas  Pacific  should  beset  up  as  a 
rival  parallel  trunk  road,  to  compete  for  the  business  of  our 
truidv  line,  much  less  to  shut  us  off  from  competition  with  it. 
That  its  rights  in  respect  to  the  interchange  of  business  are  no 


26 


oTCuter  tliaii  if  it  liad  built  its  road  to  the  lOOtli  meridian,  as  it 
eloc.ted  to  do  under  the  aet  of  186d,  by  failing  to  comply  with 
tlie  nec(^ssary  c(jnditions  to  enable  it  to  do  otluirwise.  That  is 
to  say^  vne  are  reguired  to  receive  and  forward  its  business 
upon  as  favorable  terms  as  we  receive  that  of  other  branches — 
no  more^  no  less.  We  are  not  repaired  to  erect  it  into  a rival 
of  the  trank  line.,  by  giving  it  advantages  not  taken  for  or  en- 
joyed by  ourselves. 

UNION  PACIFIC  NOT  GUILTY  OF  VIOLATING  THE  PROVISIONS  OF  ITS 

CHARTER. 

We  tlierel*ore  respectfnl.l}’  insist  that  we  violate  no  provision 
of  the  statutes  by  whicli  we  are  governed,  so  long  as  we  extend 
to  the  Kansas  Pacific  the  same  facilities  in  respect  to  rates., 
time.,  and  transportation  as  are  extended  to  the  other  branches. 

Or  taking  the  extreme  view  of  tliat  company,  that  we  cannot 
discriminate  in  our  own  favor  as  against  them  and  are  not  re- 
quired to  discriminate  in  their  favor  against  ourselves,  we  are 
guilty  of  no  violation  of  the  law  so  long  as  we  impose  on  their 
business  ivest  of  Cheyenne  only  such  a rate  as  equals  that  pro - 
qwrtion  of  oar  through  rate  earned  west  of  Cheyenne,  which 
must  be  greater  than  the  amount  earned  east  of  Cheyenne  by 
reason  of  the  greater  cost  and  expense  of  constructing,  maintain- 
ing, and  ogjerating  the  west  half  of  the  road.  This  map  be 
demonstrated  to  be  not  less  than  tvjo-thirds  the  through  rate. 

IS  THERE  AN  ADEQUATE  LEGAL  REMEDY  FOR  ALLEGED  VIOLATIONS  ? 

The  acts  charged  against  the  Union  Pacific  are,  if  true,  viola- 
tions of  the  law  to  the  iujuiy  and  damage  of  the  Kansas  Pacific 
Kailway  Company.  That  it  holds  an  adequate  legal  remedy 
for  all  such  breaches  of  its  rights  seems  too  plain  to  call  for 
discussion.  Congress,  mainly  at  the  instance  of  that  company, 
has  singled  out  the  Union  Pacific,  and  aimed  at  it  remedial  and 
penal  statutes  not  authorized  against  any  other  corporation  in 
existence.  They  have  framed  statutes  to  meet  the  precise 
difficulties  complained  of.  Congress  has  enacted  them ; and 
yet  that  company  is  still  at  the  doors  of  the  national  legislature, 
clamoring  for  further,  and,  as  they  think,  more  stringent  legis- 
lation. Yet  they  have  availed  themselves  of  none  already 


27 


enacted.  The  act  of  Marcli  3,  1873,  providing;  among  other 
things,  that  “ tlie  proper  circuit  court  of  the  United  States  shall 
have  jurisdiction  to  liear  and  detennine  all  cases  of  manda- 
“ mus  to  (compel  said  Union  Pacilic  Railroad  Company  to 
“ opci'ate  its  road  as  required  by  law,”  was  passed  at  their 
request,  has  been  successfully  invoked  in  another  instance,  lias 
received  a judictial  construction  b}^  tlie  court  of  last  resort,  and 
the  power  of  any  private  person  to  institute  tlie  proceedings  on 
behalf  of  the  public  fully  sustained.  There  is  a plain,  sum- 
mary, and  adequate  remedy  provided  to  meet  the  exact  case. 

The  statute  of  June  20,  1871:,  highly  penal  in  its  character, 
was  enacted  in  the  same  way,  framtul  by  the  Kansas  Pacific, 
aimed  at  the  Union  Pacific,  and  passed  at  its  instance;  but 
none  of  its  jiruvisions  invoked,  notwithstanding  the  lapse  of 
three  3U3ars’  time. 

But  we  insist  that  the  Kansas  Pacific  Company,  at  least,  is 
estopped  from  asserting  that  any  impediment  exists  to  an  en- 
forcement of  the  law  on  its  behalf.  On  the  29th  of  Se|)tember, 
1871:,  the  two  companies  entered  into  a written  agreement,  fixing 
the  division  of  rates  on  business  interchanged  at  Cheyenne,  and 
providing  among  other  things  that  said  agreement  should  not  be 
in  prejudice  of  the  legal  rights  of  either  party,  but  that  “ the  le- 
“ gal  rights  and  status  of  the  resgoective  companies  shall  he  the 
“ subject  of  an  amicable  legal  adjudication!'^  On  the  same  dav 
the  president  of  that  company,  in  a letter  to  the  president  of  the 
Union  Pacific  Company,  said  : 1 will  at  once  place  a cop}^  of  the 

“ same  (the  agreement)  in  possession  of  the  general  solicitor  of 
“ this  compaiijq  with  instructions  to  confer  with  the  proper  officer 
“ of  your  company,  who,  1 trust,  will  be  instructed  by  you  to  ex- 
“ pedite  the  adjudic^ation  in  conformity  with  the  agreement.” 
A copy  of  the  contract  and  letter  is  appended,  marked  “ Exhibit 
“ B.”  In  pursuance  of  this  agreement,  on  the  21st  of  January, 
1875,  a bill  in  equity  was  filed  by  that  compaity  and  the  Denver 
Pacific  Railway  A Telegraph  Company  in  the  circuit  court  of 
the  United  States  for  the  district  of  Nebraska,  praying  an  in- 
junction against  the  Union  Pacific  Companjq  restraining  it  from 
continuing  its  alleged  discriminations.  An  answer  to  the 
merits  was  filed  March  15,  1875.  No  replication  was  filed  to 
this  answer,  and  thus  the  matter  rested  until  Maj^  9,  1877 — 


28 


more  than  two  years — wlien  exceptions  to  certaiti  [)oi’tions  of 
the  answer  were  filed.  There  was  no  reason  for  this  delay,  ex- 
cept the  failure  of  the  Kansas  Pacific  to  press  tlie  suit  Ijy 
excepting  at  once,  setting  the  case  for  liearing  on  hill  and 
answer,  or  re})lying  and  proceeding  to  proof.  The  excepticnis 
filed  i*ais('  two  questions  : first,  whetlier  the  Kansas  Pacific  and 
Denver  Pacific  constitute  a branch  of  tlie  Union  Pacific ; sec- 
ond, is  tlie  inij)osition  of  an  increased  rate  on  the  Kansas  Pacific 
west  of  Cheyenne,  l)ased  solely  on  tlie  increased  cost  of  con- 
struction, maintenance,  and  operation  of  that  part  of  the  road,  a 
discrimination  against  the  Kansas  Pacific?  These  questions 
were  fully  and  elal)orately  argued  on  both  sides  on  the  15th  of 
Noveinlx'r,  submitted  to  tlie  coui-t,  and  are  now  under  advise- 
ment -all  of  whic.h  full}’'  a])[)ears  from  a certified  transcript  of 
said  cause  herewith  tiled,  and  marked  “Schedule  A.”  It  is  re- 
spectfullv  suhmitted  that  it  does  not  lie  in  the  mouth  of  the 
Kansas  Pacntic  to  complain  of  a lack  of  remedies  to  redress  its 
alleged  wrongs.  That  so  far  as  it  is  concerned,  no  impediments 
exist  to  a complete,  speedy,  summary,  and  adequate  vindication 
of  its  rights,  and  that  by  its  own  action  it  is  estop|)ed  from  mak- 
ing that  complaint. 

THE  ALLEGED  GREIYAXCE  A PRIVATE  ONE. 

The  complaint  of  the  Kansas  Pacific  is  of  a private  injury 
alone.  It  has  no  warrant,  if  it  was  so  inclined,  to  assume 
a protectorate  of  the  public  intei*est.  Its  charge  is“  that  we 
do  not  make  a fair  division  of  rates;  that  they  ai-e  so  unfair 
as  to  become  unlawful.  The  public  makes  no  specitic  com- 
plaint. The  Government  and  the  pulilic  find  transportation 
over  the  Union  Pacific  and  Central  Pacific  roads  at  the  lowest 
competing  rates — rates  not  determined  liy  considerations  local 
to  the  road,  but  by  the  competition  of  the  Pacific  Mail  Steam- 
ship Comipany.  But  as  that  transportation  is  not  over  the 
Kansas  Pacific,  that  fact  decreases  their  earnings.  In  other 
words,  the  Government  and  the  public  get  its  transportation, 
but  the  treasuiy  of  the  Kansas  Pacific  remains  empty.  The 
claim  is  that  we  must  divide  the  through  business  with  that 
company  by  carrying  a part  of  it  west  of  Cheyenne  at  a loss,  for 


29 


its  benefit.  The  evident  pnr])Ose  of  tlie  Pacnfie  railroad  acts, 
as  develo])ed  from  every  line  and  section  tliereof,  was  to  create 
a single  trunk  through  line,  with  short  branches  at  either  end 
for  the  convenienc.e  of  particular  localities.  The  Government 
and  general  public*,  would  have  been  as  well  served  if  no 
branches  ba<]  existed.  Xo  subsidies  were  granted  the  branches 
west  of  the  100th  meridian,  and  this  marks  tlie  line  of  the  in- 
tei’est  of  tlie  Government  and  the  public  in  them.  It  was 
not  intended  to  set  up  rivals  to  compete  for  the  through  luisi- 
ness  of  the  main  trunk,  thus  jeo[)ardizing  the  immense  loans 
made  to  the  trunk  com])anies.  To  do  this  was  in  conti'avention 
of  tlie  manifest  policy  of  the  Government,  and  necessarily 
endang(u*ed  the  re[)ayment  of  its  loans  by  making  it  impossilile 
for  its  delitors  to  I'epay  them  out  of  a divided  liusiness.  No 
hnancier  loans  money  to  a debtor  who,  he  knows,  has  not  the 
ability  to  pay  bis  debts,  and  to  im|)ute  to  Congress  tlie  purpose 
of  embarking  vast  loans  in  the  trunk  companies,  and  incor- 
porating into  such  loans  provisions  rendering  payment  im- 
possible, is  to  stultify  the  national  Government.  The  assertion 
may  be  safely  ventured  that,  if  the  construction  contended  for 
by  the  Kansas  Pacific  prevails,  the  power  of  making  through 
rates  will  pass  into  the  hands  of  the  Kansas  Pacific,  and  the 
onlv  altei-native  of  the  trunk  lines  will  be  to  abandon  thi*ough 
business  and  make  a struggle  for  existence  on  local  business 
alone.  K.  departure  from  the  policy  of  the  original  act  in 
respect  to  the  trunk  lines  will  threaten  them  with  bankruptcy, 
and  render  the  ultimate  repayment  of  their  large  subsidies  ex- 
tremely doubtful.  It  is  difficult  to  conceive  that  tlie  Govern- 
ment can  be  guilty  of  the  immeasurable  folly  of  destroying  the 
capacity  of  its  largest  debtors  to  pay  their  debts. 

THE  UNIOH  PACIFIC  NOT  THE  CAUSE  OF  THE  KANSAS  PACIFIc’s  BANK- 
RUPTCY. 

The  statement  persistently  made  and  industriously  circulated 
by  the  first-mortgage  bondholders,  that  failure  of  the  Union 
Pacific  Company  to  comply  with  its  lawful  obligations  is  the 
cause  of  the  bankruptcy  of  the  Kansas  Pacific,  is  finally  repeated 
in  the  late  annual  report  of  the  Secretary-  of  the  Interior,  in 
wdiich  (page  36)  he  says  : 


30 


“ In  a ])rinte(]  paper  addi-es.sed  l:o  me  on  t, lie  21st  of  April  last 
“ by  the  (diairman  and  secretary  ota  coniiriittee  of  nine  first-mort- 
“ gage  bondholders,  it  is  alleged  that  said  failure  to  pay  interest 
“ was  mainly  due  to  the  fact  that  the  Union  Pacific  Railroad 
“ Comjiany  has  persistently  refused  to  transpoi’t  passengei*s  and 
“ freight  in  connection  with  the  Kansas  Pacific;  and  Denver  Pa- 
“ cific;  Companies  on  the  terms  and  in  the  manner  required  by 
“ the  acts  of  1st  July,  1862,  2d  July,  1864-,  3d  Marcdi,  1869, 
“ and  20th  June,  187J.” 

This  is  in  flat  conflict  with  the  re[)resentations  of  the  officers 
of  that  company  repeatedly  made,  both  publicly  and  [irivately. 
In  a circular  addressed  to  the  holders  of  the  land-grant  bunds 
of  the  Kansas  Pacific  Com|)any  by  AdoliJins  Meyer,  late  jiresi- 
dent  of  that  conqiany, under  date  of  November  2,  1876,  he  says: 
“ The  Kansas  Pacific  Railway  Compaii}^  having  been  com- 
“ pelled  to  default  on  the  interest-coiqions  of  their  first-mortgaire 
“ hou(U^  owing  to  the  nonjyaijment  of  a large  sum  of  money  due 
“ said  comgiany  by  Government  for  the  transportation  of  mails, 
“ troops,  supjjlies,  i&c.,  {notunthstajiding  the  decision  of  the  8u- 
preme  Court  of  the  United  States  that  such  claims  should  he 
petid,)  ctnd  also  a falling  off  in  business  caused  by  the  general 
“ dep>ression  of  commercial  affairs,  and  farther,  the  competition 
“ of  a new  railroad,  I deem  it  my  duty  to  land-grant  bondholders 
“ to  place  before  them  some  information  on  the  present  state  of 
“ the  land-grant  under  my  charge  as  trustee.” 

And  oil  the  llth  of  .October,  1876,  the  same  person,  not  yet 
having  resigned  the  office  of  president  of  the  Kansas  Pacific 
Company,  in  his  official  capacity  addressed  to  the  Secretary  of 
the  Treasury  a letter,  in  which,  in  hitter,  indignant,  and  scath- 
ing terms  he  arraigns  the  Government  as  the  cause  of  the  bank- 
ruptcy of  his  company,  and  denounces  its  treatment  in  unnieas- 
nred  language.  A complete  copy  of  this  letter  is  hereto  append- 
ed, marked  “Exhibit  C,”  and  its  careful  perusal  is  commended 
to  all  who  would  attribute  the  woes  of  the  Kansas  Pacific  to 
tlie  Union  Pacific  Company. 

As  illustrating  the  increased  cost  of  operating  the  mountain 
divisions  of  a railroad,  I append  Exhibit  D,  being  an  extract 
from  a report  made  by  a committee  of  the  General  Assembly  of 
California.  The  facts  and  statements  of  this  extract  apply  with 


31 


equal  force  to  the  luouutain  division  of  the  Union  Pacific.  1 
also  append  Exhibit  E,  being  letter  of  General  Freight  Agent 
of  the  Union  Pacific,  showing  comparative  rates  per  mile  on  the 
two  roads  upon  the  different  classes  of  freights. 

It  is  therefore  respectfully  but  (confidently  submitted  that  in 
view  of  the  foregoing  facts  and  reasons  the  following  are  fair 
and  conclusive  answers  to  the  points  made  against  the  Union 
Pacific  Company,  and  that  it  is  shown  beyond  controvers}"  that 
no  legal  impediments  exist  to  the  enforcement  of  an}'  pul)lic  or 
private  duty  or  obligation  of  that  company  : 

First.  The  Union  Pacificc  Company  has  always  been  ready, 
and  is  mnv  ready,  to  make  rates  which  shall  not  discriminate 
against  tlie  Kansas  Pacific,  but  it  cannot  pro-rate  mile  for  mile 
on  the  basis  of  its  lowest  through  rate  from  Omaha  to  Ogden, 
as  demanded  by  the  Kansas  Pacific,  because  of  the  increased 
cost  and  expense  of  building,  maintaining,  and  o[)erating  the 
west  half  of  its  road — that  [>art  between  Ch(cyenne  and  Ogden. 

Second.  The  Government  loaned  on  the  west  half  three  times 
the  subsidy  loaned  on  the  east  half,  on  account  of  the  iri*eater 
cost  of  (construction  over  the  Black  Hills,  the  Rocky  Mountains, 
and  the  Wasat(cli  Mountains.  The  west  half  three  times  as 
much  in  construction,  and  costs  tiuice  as  much  in  maintenance 
and  operation  as  tlie  east  half. 

Third.  More  than  tivo-thirds  of  the  throuo:h  rate  from  Omaha 

c!> 

to  Ogden  is  earned  on  the  west  half  of  the  Union  Pacific,  but  it 
has  ofiered  and  now  oilers  to  divide  the  through  rate  with  the 
Kansas  Pacific  on  that  basis.  That  company  refuses  the  oUer, 
and  demands  one-half  of  the  through  rate,  or  a joro  rata  mile 
for  mile,  which  is  more  than  half  t\\Q  through  rate. 

Fourth.  The  law,  if  applicable  at  all  in  favor  of  the  Kansas 
Pacific,  (which  the  Union  Pacific  denies,)  simply  declares  the 
rule  of  non-discrimination.  One-half  the  through  rate,  or  a 
2:>ro  rata  mile  for  mile,  would  be  gross  discrimination  against 
the  Union  Pacific. 

Fifth.  Until  it  can  be  demonstrated  that  a railroad  with 


32 


moimtnin  grades  and  cairves  c-aii  1)0  l)»iilt  and  operatcid  as 
cJienplj  as  a straiglit  and  level  road  of  equal  lengthy  it  is  not 
only  against  law,  hut  unjust^  hieqaiUthle^  and  contrary  to  all 
business  2^'>"^Gedent  and  usage^  to  requii-e  tlu;  Union  Panufic  to 
irmko  with  the  Kansas  Pacufie.  an  e(pial  division  of  its  low('st 
through  rate,  or  to  rata  mile  for  mile. 

Sixth.  The  Govei’iiment  holds  a,  see-ond  moi'tgage  on  the 
Union  Pacilie  for  $27,000,000,  and  aecrned  unpaid  in- 
terest, loaned  in  aid  of  its  ('onstriietiou.  Its  li(*n  on  the  Kansas 
Paeifie,  for  like  subsidies  and  acauaied  unpaid  interest  is  $0,30t),- 
000.  Can  it  afford  to  jeopardize  the  greatei-  sum  hy  aiauing 
the  Kansas  Pacific;  with  powcu-  to  c.om[)el  the  Union  Pacj’Hc;  to 
carry  freight  and  passengers  at  a loss  ? 


Seventh.  The  Union  Pacific;  is  not  responsihle  foi-  the  hank- 
ru[)tc;y  of  the  Kansas  Pac;ific.  The  officers  of  that  company  as- 
cribe its  hankruptc;y  to  its  treatment  hy  the  United  States  and 
the  com2)etltion  of  a rival  2^  ar  all  el  railroad.^  viz.,  the  Atchison, 
Topeka  and  Santa  Fe  Kailroad,  whic;li,  it  is  well  known,  has 
obtained  most  of  the  business  of  Colorado  and  New  Mexico. 


Finally.  The  duty  and  obligation  of  the  Union  Pacific 
Coinyyany  is  a question  of  law.  For  any  breach  thereof  the 
fourth  section  of  the  act  of  Mai’ch  3,  1873,  affords,  and  was 
passed  to  afford,  a summary  remedy  by  mandamus.  The  act 
of  June  20,  187J,  affords  a cumulative  remedy,  by  q^'^^Fshing 
violations  by  fine  and  imqyrisonment^  and  imqyosing  treble  dam- 
ages. Why  do  they  not  go  to  the  courts  rather  than  to  Congress 
for  a construction  of  the  law?  An  amicable  suit,  instituted  hy 
agreement  of  parties,  presenting  clearly  and  sharply  the  vital 
questions  dividing  the  two  companies,  has  been  argued  and  sub- 
mitted, and  is  now  under  advisement  for  speedy  decision.  Is 
not  the  Kansas  Pacific  Company  estopped  from  denying  that 
it  has  a qTain.,  adequate.^  and  summary  remedy  of  its  own 
choice  and  selection  f 


All  of  which  is  respectfully  submitted. 

A.  J.  POPPLETON, 

Gen'l  AtVy  U.  P.  R.B.  Co. 


EXHIBITS. 


“Exhibit  A.” 

Union  Pacific  Kailroad  Co.,  General  Freight  Department, 

Omaha,  January  1,  1872. 

Special  Orders  No.  4. 

Hereafter  tlie  rates  upon  freight  lietween  an}^  two  local  sta- 
tions upon  tlie  line  of  this  road  will  not  exceed  the  rates  between 
Omaha  and  the  most  westerly  of  the  two  stations  in  question, 
as  given  in  local  tariffs  dated  June  1, 1870,  and  August  7, 1871. 
Sliould  the  rates,  as  given  in  the  printed  tariffs,  in  any  case  ex- 
ceed these,  agents  will  use  tlie  Omaha  rates  in  billing,  and  note 
the  words  “Omaha  Hate”  upon  the  way-bill,  as  explanation. 

For  instance,  the  rate  upon  grain  in  car-load  lots,  between 
Fremont  and  Bryan,  as  given  in  tariff,  dated  April  4,  1870,  is 
$2.30  per  100  pounds,  l)ut  as  the  I'ate  l)etween  Omaha  and 
Bryan,  as  given  in  tariff  dated  June  1,  1870,  is  but  $1.72,  the 
$1.72  rate  will  be  used  in  billing  from  Fretnont  to  Bryan,  the 
explanation  being  given  upon  way-bill  that  “Omaha  Hate”  is 
used. 

E.  P.  VINING, 

Gen' I Freight  Agent. 

Approved : 

T.  E.  SICKLES, 

General  Sup't. 


“ Exhibit  B.” 

New  York,  August  3,  1874-  ■ 

Robt.  E.  Carr,  Esq., 

Brest.  Kansas  Pacific  R.  R.  Go. , St.  Louis,  Mo.  : 

Dear  Sir:  The  Executive  Committee  of  the  U.  P.  H.  H.  Co. 
has  received  and  duly  considered  the  proposition  for  an  inter- 
change of  business  at  Cheyenne  between  the  Denver  Pacific 
and  the  Union  Pacific  railroads,  which  was  handed  to  Mr.  Sickels 
at  St.  Louis  on  the  17th  instant,  by  Prest.  Hobert  E.  Carr,  on  be- 
half of  the  K.  P.  H.  H.  Co. 

Actuated  by  the  strongest  desire  to  comply  to  the  fullest  ex- 
tent with  all  legal  obligations  imposed  on  tliis  company,  and  at 
the  same  time  aiming  to  afford  to  the  public  tiie  largest  amount 


34 


of  accommodation  consistent  with  a dne  regard  for  tlie  protec- 
tion of  the  interests  of  the  Government  in  this  road,  and  of  the 
interest  of  the  liolders  of  the  securities  of  this  company,  the 
Executive  Committee  is  compelled  to  decline  assent  to  the  pro- 
position referred  to  as  a whole,  but  respectfully  submits  the 
following  ]>ro))osition,  which  is  regarded  by  the  committee  to 
he  more  favoral)le  to  the  Kansas  Pacific  E-.  R.  Co.  than  either 
the  legal  obligations  im[)osed  on  tliis  company  or  a strict  com- 
pliance with  the  practice  of  railroads  interchanging  business 
would  require. 

1.  The  companies  agree  to  receive  from  and  give  to  each 
other  with  promptness  and  despatch  all  freights,  passengers 
and  express  goods  and  mails  going  to  and  coming  from  their 
respe(;tive  lines,  and  to  give  the  same  facilities  and  accom- 
modation to  all  such  business  as  they  do  to  business  on 
their  own  line,  providing  for  passengers  good  and  sufficient 
room  both  in  coaches  and  Pullman  sleeping-cars  when  re- 
quired. 

2.  The  Union  Pacific  Company  to  receive  for  the  transportation 
of  passengers  and  freight  l)etwecn  Cheyenne  and  Ogden  going 
over  the  Denver  Pacific  and  Kansas  Pacific  Railroads  six-tenths 
of  its  through  rate  estalfiished  from  tini(3  to  time  by  the  Union 
Pacific.  Conipany  on  like  freight  and  ])assengers  passing  be- 
tween the  same  or  corresponding  points. 

3.  On  all  business  between  Omaha  and  Colorado,  passing 

wholly  or  in  part  over  the  Denver  Pacific  railroad,  the  rate  to 
be  divided  between  the  two  roads  per  mile  as  made  up, 

and  in  making  up  the  mileage  each  mile  of  the  Union  Pacific 
to  be  taken  and  considered  as  one  mile,  and  each  mile  of  the 
Denver  Pacific  as  one  mile  and  six-tenths  of  a mile.  Should 
tlie  foregoing  proposition  be  accepted  by  your  company,  it  is 
respectfully  suggested  that  details  may  be  prepared  by  the 
transportation  officers  of  the  two  companies,  and  when  ap- 
proved they  may  be  embodied  in  a formal  contract. 

Very  truly  yours, 

SIDNEY  DILLON, 

President. 


Dexyee,  September  29,  1874; 

The  above  proposition  of  Mr.  Dillon  for  a settlement  of  the 
division  of  business  between  the  Union  and  Kansas  Pacific 
railroads  is  accepted  by  the  respective  companies,  and  is  con- 
sidered as  binding  from  this  date;  it  being  further  stipulated 
and  agreed  that  the  legal  rights  and  status  of  the  respective 
companies  shall  be  the  subject  of  an  amicable  legal  adjudica- 


35 


tion,  the  foregoing  arrangenieiit  to  he  binding  on  tlie  respective 
companies  until  such  legal  adjudication  sliall  be  liad. 

. SIDNEY  DILLON, 

President  U.  P.  R.R.  Co. 

ROBERT  E.  CARR, 

President  K.  P.  R.R.  Co. 

Kansas  City,  September  29,  1871. 

Sidney  Dillon,  Esq., 

President : 

Dear  Sir:  Referring  to  the  agreement  made  tliis  day  re- 
specting the  adjudication  of  matters  in  dispute  l)et\veen  the 
Union  Pacific  Railroad  Company  and  the  Kansas  Pacific  Rail- 
way Compan}",  I will  at  once  place  a copy  of  the  same  in  pos- 
session of  the  general  solicitor  of  this  cojnpany,  with  instruc- 
tions to  confer  witli  the  projier  officer  of  your  com|)any,  who  I 
trust  will  be  instructed  by  you  to  expedite  the  adjudication  in 
conformity  with  tlie  agreement. 

Very  respectfully, 

ROBERT  E.  CARR, 

President. 


“Exhibit  C.” 

Kansas  Pacific  Railway  Company, 
President’s  Office,  St.  Louis,  October  1I?A,  1876. 

Sir:  The  directors  of  this  company,  after  consultation,  have 
concluded  that  tlie  condition  and  necessities  of  the  company 
should  be  made  known  to  you,  and  through  you  to  the  president, 
to  the  end  tliat,  if  you  shall  find  it  to  be  in  your  power  to  pay 
for  the  United  States  the  moneys  due  to  this  company,  you  will 
do  so,  and  thus  relieve  the  company  from  impending  forfeitures. 

Three  years  ago  the  United  States  suspended  payment  to  the 
company  for  services  provided  to  be  performed  by  the  several 
acts  of  Congress.  The  want  of  the  money  compelled  the  com- 
jjaii}’  to  ask  indulgence  of  its  bondholders  for  a time  with  the 
hope  that  the  Government  would  not  long  maintain  its  attitude 
of  non-payment.  A large  majority  of  the  bondholders  con- 
sented ; some  did  not,  and  have  brought  suit.  On  the  first  of 
November  next  a large  payment  will  be  due  for  interest  on  the 
first-mortgage  bonds.  Heretofore,  in  emergencies  of  this  kind, 
the  directors  have  been  enabled  to  borrow  money,  partly  on  their 
own  credit  and  partly  on  credit  of  the  company,  to  meet  such 
pressing  demands;  but  within  the  last  three  months  suits  have 
been  brought  by  the  United  States,  for  the  benefit  of  an  informer, 
against  the  company  and  most  of  its  directors,  claiming  some 
ten  million  dollars.  We  are  advised  that  such  suits  could  not 


36 


Imve  V)een  instituted  witlioiit  tlie  co-o])eration  of  tlie  Administra- 
tion, and  were  nineli  amazed  that  the  suits  were  l)ronght. 

The  directors  of  tlie  com])any  cannot  withliold  from  you  an 
expi’ession  of  their  o])inion  tliat  tlie  suits  are  an  unmitigated 
outi'age.  The  astonishing  sj^ectacle  is  presented  of  the  largest 
creditor  of  the  c.ompany  seeking,  by  jienal  action,  to  utterly  de- 
stroy the  credit  of  the  company  and  all  the  individuals  who  are 
interested  in  it  exce])t  the  first-mortgage  bondholders.  The 
credit  of  the  com])any  is  gone,  and  the  only  wonder  is  that  the 
])orsonal  credit  of  the  directors  has  not  been  sacrificed  also. 
With  the  manifestation  of  hostility  winch  the  Government  has 
sliown  against  the  com]:>any  in  the  last  three  years,  the  directors 
are  unwilling  to  lend  further  aid  in  support  of  the  company, 
and  unless  the  Government  will  pay  the  moneys  now  due, 
amounting,  as  per  statement  below,  to  $485,387.50,  to  be  ap- 
plied to  the  payment  of  interest  on  the  first-mortgage  bonds,  I 
do  not  see  how  it  is  possible  to  ])revent  a default  on  the  first  of 
November  next,  the  consecpiences  of  which  no  one  can  now  fore- 
see. I hope  that  the  President  will  order  the  money  to  be  paid, 
if  you  do  not  feel  justified  in  doing  so. 

I beg  you  to  understand  that  it  is  not  out  of  any  personal  dis- 
res]:iect  to  yourself  or  to  the  President  that  I have  thought  it  a 
duty  to  write  so  plainly  as  I have  respecting  the  action  of  the 
Government  towards  this  company. 

When  it  is  remembered  that  the  company  constructed  nearly 
700  miles  of  railroad,  for  the  most  part  through  a hostile  Indian 
country,  wdth  money  aid  from  the  Government  for  but  384  miles 
of  such  road,  of  all  of  which,  and  of  more  than  200  miles  of 
branch  and  leased  roads  operated  by  the  company  in  addition, 
the  Government  claims  and  has  had  the  primary  use  for  the  last 
three  years,  without  paying  according  to  contract,  mnst  not  all 
just  persons  hold  with  the  company  that  the  action  of  the  Gov- 
ernment has  been  unjust  and  oppressive  to  the  last  degree? 

The  company  has  endeavored  to  come  to  an  amicable  settle- 
ment with  the  Government,  but  all  its  appeals  have  been  disre- 
garded ; and  to  further  cripple  it,  one  law  after  another  has  been 
passed  to  its  great  injury.  We  feel  that  the  Government  is  dis- 
honored in  refusing  to  pay  in  accordance  with  its  contract,  ex- 
pounded by  its  own  court.  All  the  company  desired  or  ex- 
pected was  that  its  contract  with  the  Government  should  be 
carried  out.  Without  this  it  cannot  survive.  It  does  appear, 
indeed,  that  if  the  Government  had  been  determined  to  reduce 
the  company  to  bankruptcy,  it  could  not  have  taken  more  ef- 
fective measures  to  accomplish  it. 

Again  I beg  you  to  come  to  the  relief  of  the  company,  di- 
rect the  payment  of  what  the  Supreme  Court  of  the  United 


37 


States  lias,  in  the  Union  Pacific  suit,  in  efiFect  decided  to  be  due 
to  the  company,  and  save  it  from  impending  disaster. 

Very  respectfully,  your  obedient  servant, 

ADOLPHUS  ^lEIER, 

President. 


Hon.  Lot.  Morrill, 

Secretary  of  the  Treasury.,  Washington,  D.  C. 


Note : 

The  total  amount  due  from  Government  up  to  Oc- 
tober 1,  1876,  is 8970,775  00 

Less  half  the  amount  to  be  retained  as  ]ier  acts  of 

Congj-ess 4:85,387  50 


Leaving  the  amount  due  this  company  in  cash.  . . .84:85,387  50 

Besides  the  full  amounts  due  on  tlie  Arkansas  Valley  and 
Junction  Citv  and  Fort  Kearney  Kailwavs,  being  about  880,000. 

ADOLPHUS  MEIER, 

President. 


“ Exhibit  D.” 

Comparative  cost  of  operating  the  mountain  and  valley  divisions  of 
the  Central  Pacific  Pailroad. 

It  appeared  to  be  clearly  proved  that  the  cost  of  operating  the 
mountain  division  of  the  Central  Pacific  Pailroad  was  from  five 
to  six  times  that  of  the  valley  divisions.  From  the  evidence  it 
appears  tlie  prominent  feature  of  the  increased  cost  is  the  in- 
creased })Ower  required,  and  actually  used,  in  doing  the  business 
of  the  road  on  the  mountain  division.  Trains  of  forty -five  load- 
ed freight-cars  arriving  at  Pocklin,  the  first  eastern  station  of 
that  division,  and  drawn  by  one  engine  of  medium  weight  and 
power,  requires  to  be  divided  up  into  five  trains  of  nine  cars 
each,  haviitg  an  engine  of  larger  power,  before  it  can  be  lifted 
over  the  mountain  from  Pocklin  to  Truckee.  Here  is  at  once 
five  times  the  expense  of  handling  a given  number  of  cars  en- 
tailed upon  the  management  over  and  above  that  incurred  in 
the  valleys.  But  a severe  and  additional  expense  must  also 
enter  into  the  calculation  from  the  fact  that  these  larger  engines 
tear  and  destroy  the  track  in  a much-increased  ratio;  that  the 
use  of  brake-power  upon  the  train,  in  consequence  of  high 
grades,  fiattens  wheels  and  grinds  the  rail,  and  that  the  strain 
on  the  beds  and  frames  of  cars  demand  a larger  element  of  re- 
pairs than  anywhere  else  on  the  line — swelling  the  increased 
cost  of  handling  the  traffic  of  the  road  from  five  to  seven  times 
that  entailed  in  the  valleys.  AVhen  this  comparison  is  applied 
to  the  charges  actually  made,  it  will* be  seen  that,  as  sev’ere  as 


38 


are  the  natural  difficulties,  the  cuinpaiiy  require  the  throuorli 
traffic  to  bear  a very  large  share  of  the  expense  of  doing  the 
local  luisincss  uj^on  tliat  division.  From  the  engineering  ex- 
])erts  on  the  stand  the  committee  gatliered  interesting  corrobo- 
ration of  the  main  facts  relating  to  tliis  increased  co&t.  It  ap- 
pears that  experience  and  calculati<»n  liave  demonstrated  tliat 
for  every  rise  of  twenyv  feet  in  a mile  the  work  required  to  over- 
come tlie  same  is  equal  to  the  traversing  of  an  additional  mile  of 
level  line.  In  other  words/ one  mile  of  road  with  a grade  of 
twenty  feet  is  equal  to  two  miles  of  level  road.  This  is  a rule 
now  universally  admitted,  and  not  at  all  depending  upon  the 
testimony  of  any  individual. 


Exhibit  E.” 

Uxiox  Pacific  Railroad  Company, 
General  Ereight  Department,  Omaha,  Dec.  13^//,  1877. 

Dear  Sir:  In  accordance  with  your  request,  I give  below  tig- 
ures  which  show  the  difference  between  our  local  rates  from 
Cheyenne  to  Ogden,  and  the  proportion  between  Cheyenne  and 
Ogden  of  the  through  rates  from  San  Francisco,  this  proportion 
being  tigured  upon  'd. pro  rata  mileage  basis  ; a basis  wliich  is, 
as  I shall  show,  wholly  untenable,  if  the  character  of  the  road 
between  Ogden  and  Cheyenne  be  compared  with  that  of  the  re- 
mainder of  the  line. 

The  difference  between  the  rates  per  ton  per  mile  charged  re- 
spectively by  the  Union  Pacilic  and  Denver  Pacific  Railroads 
on  their  local  business  is  also  shown  in  the  following  state- 
ment, i.  e.: 


The  present  through  rates,  Omaha  to  San  i 

Francisco,  are r ■ 

Of  -which  a pro  rata  proportion  between  j 

Chevenne  and  Ogden  gires j 

Being  rate  per  ton  per  n^e  of i 

Local  rates  between  Cheyenne  and  Ogden  are. . 

Kate  per  ton  per  mile  on  same : 

Local  rates  from  Cheyenne  to  Denver  are 

Kate  per  ton  per  mile  on  same ; 

Difference  in  rate  per  ton  per  mile  between  i 
OUT  local  rate  and  the  pro  rata  proportion  ; 

of  through  rate , 

Excess  per  ton  per  mile  charged  by  Denver  ; 
Pacific  Kailroad  over  that  of  the  Enion‘| 
Pacific  Kailroad  in  local  rates 


X 

X 

'x 

X 

X 

X 

X 

1 X 

' X 

i 

: 50 

$3  75 

i 

$2  75 

1 

$2  25 

20 

1 00 

' 73 

59 

04.6 

03.9 

1 02.8 

02.3 

19 

1 91  1 

[ 1 63 

1 42 

OS.  4 

07.4  I 

’ 06.3 

05.5 

00 

75 

50  1 

40 

18.8 

14.1  ; 

! 

09.4  1 

07.5 

03.8 

03.5  j 

03.5  : 

03.2 

10.4 

06.7 

i 

03.1  1 
1 

02 

39 


There  are  some  differences  in  the  classifications  used,  but  the 
above  figures  form  as  fair  a basis  for  comparison  as  can  be 
made. 

In  tlie  above  statement  the  proportion  of  the  through  rate 
from  Omalia  to  San  Francisco  earned  between  Cheyenne  and 
Ogden  is  given  as  i|\4  of  the  through  rate,  after  deducting  tlie 
charge  for  transfer  across  the  Bay  of  San  Francisco  of  5 cents 
per  hundred  pounds. 

In  reality,  however,  tlie  proportion  earned  between  Cheyenne 
and  Ogden  is  much  greater  than  as  the  cost  of  liaiiling 
freight  between  those  two  points  is  much  greater  than  upon  any 
other  portion  of  the  Union  Pacific  Bailroad. 

From  Ogden  to  Cheyenne  the  road  crosses  three  mountain  / 
ranges,  viz.,  the  Wahsatch  mountains,  the  main  range  of  the 
Bocky  Mountains,  and  the  eastern  range  between  Cheyenne  and 
Laramie,  sometimes  called  the  Black  Hills. 

Tlie  ranges  are  crossed  at  great  elevations  and  by  very  heavy 
grades,  the  elevation  of  the  summit  in  each  case  being  7,835 
feet,  7,030  feet,  and  8,2-12  feet  above  the  level  of  the  sea.  The 
adverse  grade  met  in  going  from  Ogden  to  Cheyenne  amounts 
to  about  8,000  feet,  or  over  one  and  a half  miles. 

It  is  generally  admitted  that  each  20  feet  of  elevation  costs  as 
much  as  1 mile  of  haul  upon  level  grade.  If  this  allowance  be 
made,  the  cost  of  haul  between  Cheyenne  and  Ogden  (516 
miles)  is  equal  to  a haul  of  900  miles  upon  a comparatively 
level  road,  such  as  the  Kansas  Pacific  or  the  eastern  end  of  the 
Union  Pacific.  The  cost  of  haul  is  still  further  increased  by 
the  sharp  curves  met  while  crossing  the  mountains. 

The  experience  of  the  past  winter  has  shown  that  extremely 
heavy  expenditures  will  l)c  necessary  to  protect  this  portion  of 
the  road  against  snow  during  nearly  half  of  the  year. 

Upon  the  remainder  of  our  road  comparatively  little  trouble 
is  experienced. 

If  we  had  a large  local  business  upon  the  western  end  of  our 
road  it  would  lielp  to  pay  this  extra  expense,  l)ut  tlie  fact  is 
that  but  very  little  business  originates  upon  it,  and  the  expense 
of  keeping  up  tlie  road  must  be  borne  entirely  by  our  through 
business. 

AVhile  the  eastern  end  of  the  road  is  being  rapidly  settled, 
this  western  half  is  almost  without  inhabitants.  No  land  has 
lieen  sold  by  the  company  here,  and  much  of  the  counti*}^  is 
p r o b a b 1 y u n i n 1 1 a b i t a b 1 e . 

If  all  the  facts  are  taken  into  consideration,  I think  that  the 
real  cost  of  hauling  freight  over  the  516  miles  between  Chey- 
enne and  Ogden  is  equal  to  the  cost  of  hauling  twice  that  dis- 


40 


tance  over  tlie  nearly  level  and  straight  road  cast  of  the  moiin 
tains. 

Notwitlistanding  the  great  difference  between  the  cliaracter  of 
onr  line  west  of  tl)e  Kocky  Mountains  and  that  of  the  Kansas 
Pacific  or  other  line  east  of  that  range,  we  have  kept  our  local 
rates,  as  well  as  those  for'onr  throngli  business,  down  to  as  low 
rates  per  ton  per  mile  as  are  charged  by  the  Kansas  Pacific 
Pailway,  as  may  be  seen  by  the  following  comparison  : 


1st  class. 

2d  class. 

1 

03 

•J1 

'o 

% 

4th  class. 

Kates  between  Ogden  and  Cheyenne 1 

Kates  between  Kansas  City  and  Denvei* 

$2  1‘) 
2 40 

$1  91 
2 00 

$1  03 
1 75 

$1  42 
1 40 

It  may  also  be  s^ud  that  at  Denver  tliere  is  competition  for 
freight  business,  wliile  between  Cheyenne  and  Ogden  there  is 
no  competition  whatever.  In  view  of  tlie  above  facts,  I am  at  a 
loss  to  see  liow  the  .Kansas  Pacific  Railway  Company,  Denver 
Pacific  Railway  Company,  or  an}"  other  company  or  individual, 
can  complain  with  justice  of  our  rates  between  Ogden  and 
Cheyenne. 

Since  the  completion  of  the  Union  Pacific  and  Central  Pacific 
Railroads  the  average  rate  charged  per  ton  per  mile  has  been 
steadily  reduced.  A still  greater  reduction  may  be  made  upon 
some  classes  of' goods,  upon  which  a very  low  rate  is  necessary 
in  competition  with  water  routes,  if  the  freight  can  all  go,  as 
heretofore,  over  the  line  of  our  road. 

Should  any  material  portion  of  it  be  diverted  at  Cheyenne,  or 
any  other  point,  our  revenue  would  be  so  affected  as  to  render 
any  further  reduction  impossible.  Should  such  a division  of 
our  legitimate  business  take  place,  it  would  probably  prove 
more  remunerative  to  us  to  cease  our  active  competition  with 
the  clipper  lines,  via  the  Horn,  upon  the  heavy  freight  which 
we  are  now  sharing  with  them,  and,  by  carrying  only  first-class 
fredght,  be  enabled  to  raise  our  average  rate  per  ton  per  mile. 

Any  action  which  should  compel  us  to  haul  freight  over  the 
unsettled,  mountainous,  and  expensive  portion  of  our  line,  and 
then  deliver  the  goods  to  some  other  company  to  haul  over  a 
smooth  and  well-settled  country,  and  which  should  compel  a 
division  of  rates  upon  a pro  ra,ta  or  other  similar  basis,  could 
not  but  be  so  disastrous  to  us  as  to  render  the  Union  Pacific 
Railroad  wholly  unremunerative. 

Such  a consequence  would  affect  not  only  the  stock  and  bond- 


41 


holders  of  the  company,  but  would  reacli  tlie  whole  country,  in 
rendering  the  ultimate  redemption  of  the  bonds  given  by  Gov- 
ernment impossible. 

We  have  hoped  that  tlie  bulk  of  the  business  between  China 
and  Japan,  upon  one  side,  and  Europe  on  the  other,  would 
eventually  seek  the  x\merican  overland  route.  The  prospects 
of  reacdiing  this  end  are  becoming  more  and  more  encouraging, 
and  before  long  this  business  will  largely  seek  tliis  route,  if  it 
is  not  killed  in  its  infancy  by  unwise  legislation  and  interfer- 
ence with  the  laws  of  trade. 

No  road  m the  United  States  gives  up  its  business  to  a rival 
after  hauling  over  half  the  length  of  its  road. 

None  of  tlie  eastern  roads  ask  or  expect  us  to  ]Dro-rate  with 
them,  but  all  liave  freely  consented  to  give  us  about  50  per 
cent,  more  than  we  would  be  entitled  to  upon  sucli  a basis. 

They  have  not  consented  to  tliis  because  of  lack  of  competi- 
tion, as  we  meet  with  as  severe  competition  by  the  water  route 
as  any  road  in  the  c.ountry  can  meet  from  a rival  line;  but 
simply  because  the  cliaracteristics  of  the  western  end  of  our 
road  entitle  us  in  justice  to  a much  greater  rate  per  ton  per  mile 
than  proves  a fair  compensation  for  tlicm. 

You  are  undoubtedly  as  well  a(;quainted  with  the  foregoing 
facts  as  myself,  but  I have  stated  them  merely  tiiat  the  reasons 
for  my  assertion,  that  much  more  tluin  'a pro  rata  proportion  of 
the  through  rates  was  earned  upon  that  portion  of  our  road  be- 
tween Ogden  and  Cheyenne,  might  be  clearly  shown. 

Yours,  truly. 


A.  J.  PoppLETON,  Esq., 

Attorney  Union  Pacific  Railroad. 


E.  P.  VINING,. 

General  Freight  Agent. 


I 


r 


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t ‘ ti  - IT  . . 


•V»  ^ 


t"^  J ■ / .*  ’ ’ ' ’“i  »’vf^ 


UNIVERSrTY  OF  ILLINOIS-URBANA 


30112 


09606639 


